Pharmaceutical companies often argue that they need to charge high prices for their drugs in the U.S. to offset their research and development costs. A new study published in Health Affairs looks at the amount drug companies spend on research and development. It finds that research costs provide no basis for high drug prices in the U.S.
As we all know, Americans pay a lot more than Europeans for many prescription drugs, sometimes as much as two to five times more. List prices in Europe tend to be 38 to 52 percent of what we pay. It’s hard to understand the justification for such high drug prices in the U.S.
The researchers looked at the 15 pharmaceutical companies with the 20 top-selling drugs. They found that the prices the pharmaceutical companies charge in the U.S. earn them tens of billions of dollars more than they spend on research and development around on the world. In short, in 2015, pharmaceutical companies generated an additional $116 billion because of the high U.S. prices, $40 billion more than their worldwide research and development expenses.
The researchers noted that European countries all use pharmacoeconomic analyses in negotiating drug prices. The U.S. does not do so. The researchers do not take a position as to whether prices in the U.S. are too high. But, they do question the propriety of U.S. taxpayers, businesses and patients funding worldwide drug research.
Why should Americans pay a huge drug price premium to support worldwide drug research? It seems a very fair question to ask our representatives in Congress. As it is, a large majority of Americans, including Republicans, Democrats and Independents favor government drug price negotiation.
If you support drug price negotiation, please sign this petition to Congress.
Here’s more from Just Care:
- Vast majority of Americans supports drug price negotiation
- Six tips for keeping your drug costs down if you have Medicare
- Free local resources to help older adults