bucket of money, sticker shock, rebates

Americans spend far more on medicines than people in any other country in the world. Researchers write in JAMA (Aug. 23-30, 2016) that “List prices for the top 20 highest-revenue grossing drugs were on average 3 times greater in the United States than the United Kingdom.”

How Bad Is it Really?

Prescriptions drug costs are rising rapidly. From 2008 to 2015 the cost for the most commonly prescribed brand name drugs zoomed 164 percent. During this same time period the consumer price index only rose 12 percent. That means that pharmaceuticals far outpaced the increases in most other consumer goods.

If milk, bread or computers went up in price like drugs, Americans would be outraged. They would likely adopt the mantra: “We’re mad as hell and we aren’t going to take it anymore.” But for reasons that remain mysterious to us, we accept stratospheric prices for life-saving medicines without batting an eye. Even when new cancer drugs cost $150,000 a year there are no protests.

Comments from readers:

Gary in Florida says:

“One reason that there is not more outrage concerning drug prices is so many Americans have entitlements. This includes congressmen, people with Cadillac drug plans, and the military. While no one believes that these
people do not deserve paying almost nothing for Rx drugs, neither they, nor their doctors have any idea what the rest of us are paying.”

Joanie in Seattle relates her experience abroad:

“Recently I cruised the Black Sea and visited Greece, Turkey and Bulgaria to name a few countries. I had left home without my Celebrex and pulled a hamstring which caused much pain. In visiting pharmacies in these countries asking for Celebrex it was available over the counter for $6. My US insurance charges $130 for a 3 month supply. I’ll try Canada next or maybe take a quick flight to Greece. Ridiculous!”

Beverly in Wisconsin adds:

“My parents bought their prescriptions from Canada for years and paid about 1/3 of the U.S. price. The drugs they purchased had been manufactured by well-known companies in the United Kingdom.”

What Happens in Other Countries?

In most countries around the world governments limit how much a pharmaceutical company can charge for a given product. In addition, national health services negotiate prices based on their perception of the value of the medications. In contrast, U.S. government programs including Medicare are not allowed to negotiate drug prices.

Insurance companies have shifted costs by increasing deductibles and co-payments. As a result, some people find that their prescribed medications are out of reach. To overcome these problems the authors recommend enhanced competition, negotiation by governmental payers and value-based decision making by doctors and patients.

What Can you Do?

In our recently revised 20-page Guide to Saving Money on Medicines we offer several tips for patients. They include:

  • Find out about access to free medicines. The pharmaceutical industry offers help to people on limited budgets who qualify for their programs. It will require help from your doctor, though.
  • Shop around. Prices can vary widely from one pharmacy to another. We bet you didn’t know that you can also negotiate price with a pharmacist. Consumer Reports suggests asking: “Is this your lowest price?” You might be surprised to learn that just asking can get you a better deal.
  • If you don’t trust all generic drugs, find out about authorized generics. They are often made on the same production line as the brand name but cost a fraction as much.
  • Consider online shopping. PharmacyChecker.com provides access to verified Canadian pharmacies.

Check out our Guide to Saving Money on Medicines for more details on these any many other strategies for controlling outrageous drug prices. If you are not outraged about drug costs, please let us know why in the comment section below.

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  1. Brenda

    Americans are outraged at the cost of brand name drugs. The problem is the politicians they keep voting for are corrupt and aren’t doing anything about it. These politicians are being paid by the same BIG PHARMA that pays the FDA to look the other way while Americans suffer and die because of their greed.

  2. Frank
    West Virginia

    Part of the problem is the obscene level of salaries the drug companies pay their top people. For example, nearly $19 million WV Sen. Manchion’s daughter, CEO of Mylan Labs, receives. No one is worth that kind of money! Add that overhead to the amount of money to what is spent on advertising and it’s no wonder these folks can claim they have to charge more.

  3. Roberta
    Clemmons, NC

    I really believe that we, the middle class, are being taken for a ride in this country and it may be on a train to poverty for all. All healthcare for the middle class is ridiculous. You talk about shopping around for the best price but with insurance, I’m not sure that makes any difference. We need the insurance but they pay what they’ll pay and we get stuck with the difference regardless.

    Although most of the time we do get a much better price, I don’t know how long that will continue to be true. Because the insurance company is paying the lion’s share of the cost, I don’t know how shopping around helps. And are we sure that the companies that are discounting the prices are giving us a quality product? I’m not sure what the answers are. Thanks for doing your part to give us alternatives and keeping us abreast of the healthcare crisis we are in.

  4. Gaylene

    You ask us if we are outraged and offer places to find less expensive prescriptions. We are the voiceless majority. We can write to representatives, big pharma, and maybe to God, nothing will change unless our government decides to run our government FOR THE PEOPLE.

  5. Robin
    Portland OR

    I’ve been calling my senators and congress representative about the rising cost of insulin for years. I feel like the person answering the call could care less. The pharmaceutical companies are one of the biggest lobby groups next to “defense” industries. Even though production cost have not changed radically the cost to the consumer/insurance co. has TRIPLED over the last decade. Type 1 diabetics like myself have no other options for insulin or death. In other countries the cost is a fraction as much. Pharmaceutical companies raise prices to keep their investors happy and their CEO’s rich.

  6. Ellen
    Dallas, Texas

    I think that we should have long ago gone to a single payer system for healthcare and prescription medications. We are the only modern nation on this planet that messes about with insurance companies and pharmaceutical companies who raise their prices astronomically and routinely.

    A representative from Kroger’s pharmacy called me , in answer to my question about authorized generic form of Norvasc, to say that she knows what it is but Kroger’s pharmacy cannot get it. I am looking to go Canadian because I cannot take the usual generic form of that drug.

    The VA has the authority to negotiate prices for drugs, but Medicare does not. That is ridiculous and very dangerous, especially to those of us on fixed incomes who are seeing the price of our medications climb almost daily. My husband and I are watching our property taxes go up, our homeowners insurance go up, our car insurance go up, our medication prices go up, and our coverage drop in all cases, even the taxes which do not pay now for what they used to pay for. This is inflation at its worst and it is threatening to a lot of people.

    Most of us feel pretty helpless to try to do something about it. I am a community activist with some success in making changes in my city, but I feel largely helpless
    to fight the rising costs of medications. I just got a bill for my daily newspaper that is $4 higher this month than it was in July. And the paper is mostly ads now anyhow. We pay the price because breakfast and coffee without the paper is just distressing.

  7. Cherry

    I thought Obamacare was supposed to fix these problems? Seems like access and cost of US healthcare has gotten worse since the “Afforadable” Care Act was forced on us. Where’s the outrage, indeed.

  8. don

    Why does the truth need moderation?

  9. don

    100% American greed. Why not tell the truth?

  10. Virginia
    greensboro nc

    3 yrs. ago I was prescribed Asacol HD for UC. It was $79 for a month’s supply. Now, it’s over $600 for the same drug, same amount of pills. Have now been prescribed a generic (sulfasalazine) which is $2.00 – go figure. Would rather not take anything.

  11. HelenM

    I am outraged! I fell into the donut hole in March this year, the earliest ever. Last Month’s drug report from my insurance company looks like I may wade all the way thru before the end of the year. If so, I will do all I can to get every one of my scripts filled at a very low price! In the meantime, I have no choice, I put them on a credit card that I can no longer pay off every month. Like so many people, I feel that our elected reps are working to feather their own pockets at the expense of mine. The VA negotiates; but gov’t keeps lowering their support, maybe because of this power? Medicare is the most powerful provider in the country, perhaps the planet; it should definitely have the power to negotiate drug prices and standardize what we pay thru Medicare Advantage programs, as well as straight Medicare or a separate pharma benefit supplement.
    The pharma companies claim they need these exorbitant profits to finance research, but in truth most of that research is at schools and financed with gov’t grants. NIH does other research. Pharma benefits, maybe we should charge them with this service taxpayer dollars provides.

  12. Jessie

    Why should we be outraged ? The high drug prices and corruption seems to be in line with the F.D.A. and all our elected officials who have the power to correct this injustice to the American people.

  13. Bill
    katy, tx

    All (most?) other developed countries negotiate what they will pay for drugs. Our congress forbids this because these companies give them so much money. What we need is that we pay the lowest price granted to any developed country. Then the drug companies will understand that Uncle Sugar isn’t going to pau all of the development costs any longer. This could work.

  14. M

    When I first got on Medicare Part D, Desonide was $5 or $10 for a tube. In one year it went up from that to $300 (or maybe it was $315) for the same tube. So I switched to using a natural substance for my skin problem. The doctor has okayed it.

  15. Larry M
    Raleigh, NC

    You wrote “Shop around. Prices can vary widely from one pharmacy to another. We bet you didn’t know that you can also negotiate price with a pharmacist.” Ever actually tried this?

    I tried this at the Raleigh Wal-Mart. The pharmacist refused to give me a quotation unless I first transferred the prescription to her store.

    For now I’m using GoodRx.com for quotations, a superior source.

  16. Kris

    My husband had a genetic lung disease & was on many heavy duty pescriptions. His brother-in-law was on vacation in Mexico & was able to purchase many of the medications over the counter for next to nothing compared to what we were paying in the U.S.

  17. Joan
    St Petersburg Fl

    I think it’s outrageous!! I had been taking a drug for RA and the price was very low because it was an older drug. All of a sudden the price went from $4 a month to over 100. It was helping me a little so I continued to take it but the price kept going up. Finally it reached $130. After paying for a year I decided it was not helping enough to warrant the cost. So, I take an extra vicodin if I am in extreme pain. It’s a sorry state of affairs that I would have to use an opiate because the price was so much lower. The FDA is involved in a lot of this mess. They take the older medications off the market for retesting. When it comes back on the market the price has skyrocketed.

  18. Rich
    Charlotte, NC

    My pharmacist just called to say that Viagra has jumped 25% in price since I last filled it and 100% since 2014. Viagra hasn’t been covered by my insurance for at least 10 years. I just wrote my two Senators – one of whom states that he favors free-market solutions to rising health-care costs. I urged him to lead the charge in Congress for applying that free-market approach to where we can buy our drugs, including outside the U.S.

  19. Marilynn

    I AM Outraged! But what can I do? Nothing I do seems to matter.
    WHO to complain to? Let us know.

  20. Betsy

    From what I understand, it is Congress that has restricted Medicare on its ability to bargain with with the pharmaceutical companies about pricing of drugs and that the insurance companies follow Medicare’s lead. It is Congress that needs to act, and it has not. Betsy

  21. William

    Priced Coumadin at Costco over $225 & at a Canadian pharmacy
    at about $70 for BMS name brand for 5mg. The 4mg was about $30 less.

  22. Diana C.
    Chattaroy, WA

    I believe that the biggest obstacle to the high price of drugs in this country is related to the relationship “Big Pharma” has with our congress. Most of the other countries have a form of “single payer” medical care and are able to negotiate with drug companies on the prices of drugs. In the USA we have congressmen and women who receive compensation from the health care industry and won’t allow common sense medical care or single payer to be passed. I do not like to blame political parties but I have seen that the Republican party is the party that gets the biggest payoff for not allowing this country to be able to have the same kind of healthcare that other countries have and be able to obtain drugs that don’t cost you an arm and a leg. I am on Medicare and I have the same problem in having to pay high prices for drugs and other healthcare needs I have even though I have to pay the 20% that Medicare does not cover.
    The only solution I see at this time is for all of us to become better informed as to who our representatives are that represent us and if they do not want less expensive healthcare find someone who is willing to fight for you. If we can have a representative Congress that is willing to go beyond getting payouts from big Pharma we will be able to change our health system so it responds to the needs of the people in this country.

    • Dan

      Bottom line: People aren’t outraged because most people think that someone else is paying for them.
      If we had no insurance plans, we would shop around – and prices would go down.

      Re: so-called “single payer healthcare” – This will be even worse because then there will literally be no alternative to the worst possible healthcare. And if you need life-saving cancer treatment, do you really want some dingbat on your local city council telling you that you aren’t worth it. (This happens in the UK.)

      Our healthcare system is the best in the world, even though insurance companies make big money from not paying out more than they take in.

      • Brenda

        Dan, try going without a health insurance plan and see how well that works out for you. The first time you get really sick, you will be on FB starting a go-fund me account.

  23. Mary

    I had the experience recently when getting the same medication and being charged double for the co-pay from what I had been paying….why should I have to find a program to help me pay for it…..that’s doesn’t lower the price of it….why do we have to put up with someone lining their pockets….whose fault is it … my insurance?…

  24. Julie

    As a pharmacist, I see examples of this every day. People on Medicare Part D are reaching the “donut hole” earlier every year due to the high cost of their meds. I have customers on insulin pens who cannot afford their prescription because the cost has gone from a copay of $47 to a copay of $204 every month and that is even the discounted Med D price. It doesn’t help when I tell them that “usual and customary” price is $ 489 and they are getting a discounted price. Many times I have people going without their meds since they can’t afford them. Switching to vials and syringes might save some, but it is the cost of the insulin that is so high.

  25. Kerry

    I am outraged!
    I ordered your “Guide to Saving Money on Medicines.” Informative. I asked my Pharmacist about “authorized generics,” his response: “all generics are authorized by the FDA.” He had no clue! I tried to explain and he became more and more irritated. I can only imagine his response if I asked if “this is you’re lowest price.” Good ideas but, do they actually work in practice?
    I would like to know if there are any 2016 candidates that are trying to change the law that Medicare cannot negotiate drug prices!

  26. don

    It is 100% Aamerican greed and nothing is going to change. Tough luck for the little guy because no one cares.

  27. Olivia
    Winston Salem NC

    I am extremely angry about the cost of prescription drugs. Yesterday, my husband and I learned that a drug for Parkinson’s disease had gone up $26.00 for a month’s supply, forcing us to pay a total of $284.00 copay. We have a Medicare supplement for which we pay $200.00 per month. That’s just for one of us. We cannot afford this. We are just barely ineligible for any of the “assistance”programs offered. When we called the insurance company to find out if the higher price quoted us was accurate, we were told we were in the “donut hole” (we’re in the “hole” all right!).

    We were also told that the pharmaceutical company has a deal with the insurance company so that when the patient is in the donut hole, (in our case-7 months of the year), the pharmaceutical company pays the INSURANCE COMPANY 50% of the cost of the drug, the insurance company pays 5%, (yes ,FIVE %) and the patient (consumer) pays 45%.

    There is something wrong with this picture. We really don’t know how we can continue to pay for this much needed medication. We will definitely be following up on the resources you suggest (other countries). Thank you for your info and concern. We know there are many people out there in our position and much worse.

  28. Gael

    I suspect more people are not outraged because they have a small copay and never see the full amount that the drugs cost. It’s hard to connect sky-high insurance premiums with drug costs (and other medical costs) when you don’t pay it directly. Our whole system is broken, and too many people are making too much money to allow it to be changed.

  29. Art

    It is easy to say shop around. Doctors now do NOT give paper medications, forcing you to choose a pharmacy . If your insurance plan does not cover it, good luck.

    I understand sometimes pharmacies can not read a hand written script, but why not give a computer printed script to the patient if he or she wants it?

    The whole system stinks.

  30. Bernie

    Drug companies have huge expenses. Buying Congress, the FDA, the FTC, the SEC, etc. costs big bucks. And then you do need a little left over for executive bonuses. You people just don’t understand. You ain’t no senator’s son (or daughter).

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