Why drug prices in America are so high (2016)

According to them, the other developed countries that have negotiated lower rates for drugs serve a different purpose. Those countries have lower requirements around testing of drugs and medical devices, and they are able to move to human trials and market sooner there. The trade-off for those countries is slightly higher risk of sub-optimal outcomes, but this appears to be more accepted by the populations of those countries than it is by Americans.

I'm not writing this to vouch for this setup - it seems like it is pretty unbalanced and ultimately does a lot of harm to people in the US due to drug inaccessibility - but I thought I'd share it for another perspective.

The price for 30 atorvastatin, whose out-of-pocket cost is about $20, was $160. The same with other cheap generic heart medications.

Complaining about high drug costs is a red herring. Drug prices are a small fraction of healthcare costs, and even if new drugs were made cheap, healthcare providers would still overcharge for them.

I think we could have more accountable research if instead of being driven for profit it was driven as actual academic research with public domain benefit.

However, it's not so simple to just relabel the drug, after all to a first approximation a drug is primarily an active ingredient and secondarily a delivery mechanism. You can patent one, the other or both together. There's definitely remixing, reformulation etc. for patent purposes, but it's not always that trivial to do.

Re. regulatory capture, I don't know if the FDA or regulatory capture thereof is that huge an issue. The chief advantage other countries have is the ability to say, "No." Medicare doesn't have that ability, and even if we were to allow CMS (the agency that administers Medicare/Medicaid) to negotiate for drug prices, it's not much of a negotiation if CMS can't say, "we're not buying it." Can you imagine the outrage in congress from people calling in and saying, "I need this drug and Medicare isn't paying for it."? I guess that's regulatory capture in some way, but damn is it more complicated than cozy agency-industry relations.

A really great and sober take on drug pricing from someone who's been in the industry forever can be found here:

http://blogs.sciencemag.org/pipeline/archives/2015/12/02/a-l...

EDIT: Typo s/companies/countries/

No, very few countries - even those which regulate prescription prices - have monopsony pharmecutical purchasers. Germany does not. Canada does not. The Netherlands does not. Even France does not. Technically the UK doesn't either, because each England/Wales/Scotland/Northern Ireland are operated separately.

And as explained in the article, these systems only work because the US picks up the tab in funding research and development, even for pharmaceutical companies based in Europe. If the US weren't far and away larger than all the countries which do have monopsony purchasers, that setup wouldn't work, because nobody would be funding the development of those drugs in the first place.