Drug prices are increasing 7 per cent p.a. when Americans feel poorer
America’s President in waiting has declared war on an industry that is bleeding the nation dry. He has the cost of drugs at the top of his agenda which is why the stock prices of many of the powerful companies in the industry (Pfizer, Merck and Britain’s GlaxoSmithKline) are falling further than other stocks.
With “President Obama” will come a serious discussion about socializing the nations drug supply. The current system simply is not working with American expenditure per head on healthcare double the amount in Britain and a large part of that is related to the cost of drugs.
On average, for the same drug, an Americans pays twice as much as someone in the UK. While American insurers pick up a great deal of the bill the lack of efficiency is a problem. Despite the insurance system, over 45% of healthcare costs are carried by the American taxpayer.
According to polls, healthcare costs are a bigger issue than Iraq for most Americans, hardly surprising given that it affects a greater number. Many pensioners fly to Canada in search of cheaper prescription medicine while others use the Internet to access online pharmacies most of which offer drugs from other countries at much lower prices. In his campaigning Senator Obama said he supported drug imports but he also wants to fix the underlying problems causing the price disparity that exist between America and other countries
Of course the drug giants argue that without their US profits, research and development of new medicines will slow. It is true that the industry reinvests more of its sales revenue than most back into R&D however its problem is that innovative drugs with high sales potential are simply not emerging.