I just did an impromptu Facebook Live talk about a speech Hillary Clinton just gave, in which she talked about tackling the high price of prescription drugs. (You can watch the broadcast on Facebook, here.)
To Hillary’s credit, she made specific mention of the fact that we pay more in America — significantly more — for the same drugs that are sold in Europe at a much lower price.
I’d written extensively about how US drug companies fleece American consumers by charging us 5 time or more what they charge Europeans for the same drug. But Hillary noted another reason why this is unfair: American taxpayers are subsidizing these drugs companies. We subsidize through tax breaks, and we subsidize it through the FDA. As Hillary notes, our FDA, paid for by American tax dollars, makes sure these drugs are safe, and then the drug companies make money all over the world based on that seal of approval that US taxpayers paid for.
Now, let me walk you through just how badly Americans are fleeced by these drug companies. Let’s look at a few top asthma drugs, and what they go for in France vs. the US. These are prices from a few years back, when I did the comparison from Paris.
Advair — 5.3x more expensive in the US
Symbicort — 4.5x more expensive in the US
Asmanex — 7.9x more expensive in the US
Also obscene is the whopping increase in the price of these drugs in the US over the past 5 years, while at the same time these companies actually dropped the price in Europe.
So not only have these drug companies overcharged Americans by an obscene amount, and increased the prices of these drugs by an obscene amount, they actually dropped the price significantly in Europe over the past five years.
Why, you might ask are prices so much cheaper in Europe? Because over in Europe, the governments negotiate with Big Pharma to get a lower price. Our government doesn’t — and in fact, the federal government is banned by law from negotiating cheaper drugs prices for Medicare recipients. As the NYT notes, the drug companies get around all of this by simply charging more to Americans to make up the difference for the lesser profit in Europe:
Many other countries control drug prices in some manner, so drug companies have become dependent on increasing prices in the United States to grow.
Economist Steve Kyle did a nice write-up for us a while back, explaining how drug pricing works, and how the drug companies simply charge Americans more to make-up for lower prices in Europe.
One final point: Drugs aren’t cheaper in France because they’re subsidized. No one subsidizes anything. They’re cheaper because the French government simply negotiated a cheaper price. And mind you, that $25 or $73 you may pay in France for a high-end asthma drug isn’t what Frenchmen actually pay. That’s the price without insurance. If you have insurance, and everyone there does, the prices is significantly less.
So, by virtue of our American citizenship, we’re paying a massive drug tax in order to subsidize cheap drugs for Europeans. And most of our politicians are okay with this.
Hillary isn’t. November can’t come quickly enough.