If there is one thing that drug companies and the people who foot the US’s healthcare bill can agree on, it is that Americans pay too much for medicines relative to other western countries. With only 4.6 per cent of the world’s population, the US is responsible for 33 per cent of global drug spending. In the US, drug companies are mostly allowed to price their medicines according to what the market will bear, without interference from a national regulator. That freedom, the companies say, allows them to cover the considerable cost of developing and winning approval for new treatments, which now runs at $2.6bn per medicine, according to the Tufts Center for the Study of Drug Development.
But US patients, insurers and employers are struggling to cope with much higher healthcare bills and rampant drug price inflation. In 2018, drug spending per capita in the US will be $1,400, compared with about $750 in Canada, according to the IMS Institute for Healthcare Informatics. The Affordable Healthcare Act originally included mechanisms to put a brake on increases in drug prices, but many were ditched to get the pharma industry to back President Barack Obama’s signature reform. As a result, many Americans buy their prescription drugs from websites based in Canada and Mexico, in most cases without any repercussions, although the US drugs watchdog warns it cannot vouch for their safety. Some US states have even tried to bypass high drug prices by importing drugs from abroad, most notably Maine, which had a law allowing residents and employers to buy medicines from pharmacies in Canada, the UK, New Zealand and Australia.
A federal judge struck down the Maine law earlier this year, prompting some senators, including veteran Republican John McCain, to introduce a new bill: the Safe and Affordable Drugs from Canada Act. Few expect it to be passed any time soon.
Source: FT, 12 Apr 2015.