Tuesday, January 19, 2010

Price Spread Between Generic and Branded Drugs

Having lived in both London and Hong Kong over the last 10 years, my wife and I were startled by how much cheaper the same prescription drugs were overseas than here in the United States.  (Prescriptions that cost  $20 -$50 to fill there, could cost several hundred dollars here. Startling.) The reasons for this are well known.  And this indefensible price spread is why I would support so strongly a law allowing the reimportation of prescription drugs from abroad, measures opposed in the strongest possible terms by drug companies.  Notably, that's not part of the currently proposed healthcare reform legislation.  Why is that?  Because cost control is not really the object of this legislation? Or because 'Big Pharma' are huge donors to congressional campaign funds? Both?

Either way, it is easy to simply blame "those bums in Congress"  and those "evil drug companies" for spiraling healthcare costs in this country.  But there's plenty of blame to go around. And we need to look hard at ourselves.  I've written here many times before about the impact of nationwide rates of obesity on our healthcare costs.  But there's more to it than that, of course.  Another problem is that we (and our doctors) overwhelmingly choose more expensive branded drugs when getting prescriptions filled, as opposed to much cheaper generic drugs with the exact same active ingredients, in stark contrast to patients overseas. (In most cases this is because American patients with health insurance pay the same out-of-pocket cost either way, despite branded drugs being much more expensive than generics.  And drug companies market to doctors very aggressively, as well as going over their heads to us directly, though endless television advertisements.)  Unfortunately for us, the United States typically suffers the biggest price spread in the world between branded drugs and their generic equivalents. The Economist magazine has a chart today that illustrates starkly this price spread in various countries worldwide, which you can view by clicking HERE. Read it and weep.

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