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U.S. Drug Costs Must Be Weighed Against Benefits

Monday, December 28, 2015   (0 Comments)
Posted by: Angela King
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Re “The U.S. Pays a Lot More for Top Drugs Than Other Countries” (Dec. 10):

Your article failed to include important information about the broader context of health care spending in the U.S. and around the world.

The fact is that drug prices are far from unique compared to other categories of health care spending. Compared to other developed countries, spending in the U.S. is higher for nearly all categories of health care.

For example, a hospital stay in the U.S. costs over $18,000 on average. The countries that come closest to spending as much (Canada, the Netherlands and Japan) spend between $4,000 and $6,000 less per stay. Across OECD countries, the average cost of a hospital stay is about one-third that of the U.S., at $6,200. A 2010 study (Koechlin et al.) found that many common medical procedures such as appendectomies and coronary angioplasties cost two or even three times as much in the U.S. than in other OECD countries.

Additionally, according to a 2012 Commonwealth Fund Report, in select OECD countries, the average prices for the 30 most commonly prescribed generics are almost double the average prices of these medicines in the U.S. A recent study found that the higher prices of generics in Spain, relative to the U.S., were an unintended consequence of price controls intended to keep costs down.

Finally, the discounts on drugs and other areas of health care spending that other countries may enjoy are not without costs of their own. Survival rates for many types of cancer in the U.S. are significantly higher than for patients in the U.K., largely because the U.K.’s health system restricts access to many therapies in an effort to drive down costs.

Any examination of spending on prescription drugs ought to carefully assess the value of innovative medicines and patient access to them, and do so in the context of the health care system overall.

Jim Greenwood
President and CEO, Biotechnology Industry Organization (BIO) Washington
Dec. 28, 2015


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