U.S. consumers pay more for drugs

David Sell, Inquirer Staff Writer Posted: Tuesday, April 9, 2013, 6:01 AM

U.S. consumers and taxpayers usually pay more - often much more - than people in other developed nations for brand-name drugs, according to a series of papers published Monday in the journal Health Affairs.

Moreover, consumers here can't see through the fog of the pricing system to know how much their medicines should cost.

"On a personal level, U.S. citizens pay prices sometimes twice as high as most other countries for identical drugs," Gerard Anderson, director of the Center for Hospital Finance and Management at Johns Hopkins University and a coauthor of one of the studies, said.

"From a policy standpoint, we are supporting the drug companies' innovation for the rest of the world," Anderson said. A link to the Health Affairs paper he helped write is here.

Most other developed nations use various mechanisms to keep prices lower. Direct government payments to drugmakers are lower. Some compare the value of similar medicines and will not pay more than the average price for the group, not simply the price applied by the manufacturer. Some reduce the number of entities negotiating to lessen drug-company leverage.

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In the United States, the biggest government medical insurance program, Medicare, has been restricted by law from imposing many such measures.

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U.S. consumers pay more for drugs