Why Do Americans Pay More for Prescription Drugs?

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In the United States, the cost of Revlimid, a cancer drug, has been rising for twenty years and now sells for almost $1,000 per pill. In contrast, prices in Europe have consistently been lower, sometimes by two-thirds. The author began investigating Revlimid after being prescribed the drug for multiple myeloma, a blood cancer. Shocked by the high cost, they discovered that the drugmaker, Celgene, had been using Revlimid to increase profits in the U.S. for over a decade by raising prices at will.

Apart from Revlimid, there is a general price gap for prescription drugs between Americans and those in other affluent nations. Rising drug costs burden patients with debt or force them to choose between buying prescriptions or groceries. Why is there such a discrepancy in drug pricing, and is any action being taken to address it?

In most wealthy countries, governments establish a single drug price based on therapeutic benefits and prices in other nations. In the U.S., drug companies largely determine their product prices. They can negotiate with insurance companies to lower prices, but for diseases like cancer, this may lead to public backlash. Pharmaceutical companies argue that high American drug prices reflect research and development costs.

One proposed solution to reduce costs is to align U.S. prices with those in other wealthy countries. Senators have introduced a bill to penalize drug companies that charge higher prices than the average in select countries. President Trump has supported similar actions in the past.

The pharmaceutical industry opposes linking U.S. prices to other countries, arguing it would take decision-making power away from doctors and patients. The Trump administration is reportedly planning to announce drug pricing measures soon, with potential opposition from industry groups and concerns about international pricing mechanisms.

The White House did not respond to requests for comment on the expected drug pricing plans.