Many countries need be thankful to the US and other richer nations for something they might not even realize. It’s the cost of prescription drugs.
Why? Because most drug companies practice what is known in the industry as a “price gouge”. This practice is worldwide and yes, it’s basically a
Now the big talk is about getting prescription drugs from Canada.
"Representative Bernard Sanders (I-VT) said the newest ads by the pharmaceutical industry are proof that legislation to allow the reimportation of
FDA-approved medications from other countries is gaining momentum and has taken center stage in the fierce debate over prescription drugs in Congress.
The full-page ads, which ran in the Washington Post on Sunday and Monday, attack Sanders’ legislation, using unfounded assertions and scare tactics
that ignore the facts surrounding the reimportation issue."
Just look at the price differences:
Prescription Drug Comparison - Compare Drug Prices between the U.S. and Canada
This whole matter prompted me to ask "what's the big deal"? In asking that question, I learned more about this practice of the "price gouge".
Have a look at this chart of two popular prescription drugs, Synthroid and Micronase.
Now of course, most of the talk is about senior citizens paying high costs so drug companies can make their huge profits, but there is more. The
entire US pays generally higher costs. Why? To cover the expense of Research and Development (R&D). The US and many other countries are "price
gouged" the costs of research, so that poorer countries can not only have the drugs, but pay lower costs as well. How many countries are out there
that say "what has the United States done for us"? How little they actually know. We pay the high price of being a successful nation and help foot
the bill for the world.
Many other countries too, but not quite as much as the United States. Have a look at this comparison:
USA = $1.00
Switz. = 65˘
UK = 64˘
Germany = 60˘
Sweden = 60˘
France = 51˘
Italy = 49˘
"South African Aids patients have been given new hope by pharmaceutical giant GlazoSmithKline announcing that it will cut the price of some
antiretrovirals by nearly 50%."
Jean-Pieere Garnier, chief executive of GSK, said: "Our price reduction demonstrates our commitment to making life-saving medicine more affordable
through sustainable preferential pricing."
Firm slashes Aids drug prices
"Preferential pricing" = "price gouging"
Discounted pricing for least developed countries (LDCs)
(Cost of daily dose, $)
USA = $10.00
LDC = 0
USA = 9.83
LDC = 0.15
USA = 10.68
LDC = 3.80
USA = 27.92
LDC = 6.60
USA = 18.50
LDC = 8.70
USA = 52.71
LDC = 19.20
Source: UN Africa Recovery from UNAIDS data as of 2001.
So poor countries get the medicine they need, and richer countries foot the bill. Is this acceptable? From a humanitarian standpoint sure, but what
makes the US or other richer nations responsible for the worlds problems? How many poorer countries think we just stick our nose where it doesn't
belong and that the average American does nothing for them? Do they have any idea that we all foot the bill for their medicine?
They claim that we intrude and we should mind our own business. How would they feel if we did mind our own business and the medicine they need was
priced so high they could not afford it? Then as their mothers, brothers, and children die...they would come back "help, oh help". I find this an
interesting political question.
As for the conspiracy in the matter. That comes from the fact that most average citizens don't know the drug companies make richer nations pay for
the world's R&D. The market for drugs in less-developed countries is too small and too poor to support the research and development costs required to
create a new drug. (On average it costs more than a half of one billion dollars to create a new drug.) Once a drug has been created, however,
production costs are typically low. So long as the price covers production costs, firms can recoup some of their R&D costs by selling drugs at low
prices in less developed nations....yet the richer nations still pay more and foot the difference.
Put simply, if firms had to charge a single low price throughout the world there would be no money to spend on R&D and no new drugs. If firms had to
charge a single high price throughout the world then consumers in less developed countries could not afford to buy any new drugs, and US and other
richer nations would pay 100% of the R&D costs. "Allowing a firm to charge different prices in different parts of the world benefits consumers
everywhere" is the belief, but how do I benefit? I pay more? Is that my benefit? And when I travel to a less developed country, they hate me?