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Tuesday 6th December 2016
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Drug companies charge too much

3rd June 2008

Writing in The Guardian, co-director of the US Centre for Economic Research Dean Baker argues that Americans are being held hostage to high drug prices.

Whistleblower

Drug companies defend their position of asking consumers to pay their protected prices for prescription drugs by claiming that it takes a lot of money to develop them.

That leaves patients bearing the cost of drug research at the point they need a drug. Why do we think that makes sense?

Remarkably, at a time that $250bn is spent annually on prescription drugs in the US, there is no public debate on how we finance drug research.

Without government-imposed patent monopolies that figure would fall by $200bn, money the Congressional Budget Office says buys about $25bn a year in pharmaceutical research. That seems a poor deal.

Furthermore, huge mark-ups on drugs may lead to corruption when a drug that can be sold for $500 costs $4 to manufacture and distribute. Drug companies may be tempted to conceal clinical evidence under the current system.

But there are alternatives to patent monopolies. With the $30bn the US government spends annually on drug research regarded as good value, should we not double that to pay the full cost of developing drugs, then sell them all at $4 in a competitive market? Or how about a half way house of paying for the clinical trials?

What we need is a ‚Äúserious national debate‚Ä? on the current patent system and the alternatives but with the drug companies currently so powerful, we‚Äôll just continue to ‚Äúpretend there is no better way.‚Ä?

 

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