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U.S. drug prices very high
18. Americans seem unaware how much more they are paying for drugs than other countries, in the name of the "free market" where prices are controlled by corporations. So-called "price controls" abroad are negotiated wholesale prices. Corporate price controls in the U.S. are un-negotiated monopoly prices, which then large buyers negotiate down.
According to a detailed analysis, American employers and health plans pay at wholesale 2.5-3.5 times the prices in Australia and other countries with comparable prices for patented drugs (Productivity Commission of Australia 2001). There is no evidence that these prices do not cover research costs. U.S. generic prices shadow patent drug prices and are also 2.5-3.5 times more.
19. High American prices are essentially monopoly rents charged to employers in every other industry. They shift profits from other industries to the drug industry.
20. If American prices were cut in half, research budgets would not have to suffer unless executives decided to cut them in favor of marketing, luxurious managerial allowances or high profits. They probably would not, because R&D gets such favorable tax treatment compared to other expenses. Lower prices would save other Fortune 500 companies billions in drug benefit costs, and drug company profits could come into line with the profits of the companies who pay for their drugs.
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