Are Identical Treatments Worth 834% More?

posted by Alicia Caramenico

on April 1, 2015

Health plans work hard to ensure access to safe, effective treatments. But those efforts are undermined by drug manufacturers charging Americans the highest prices in the world for the exact same brand name drugs. The practice of charging different customers different prices for identical products (think airlines or hotels), commonly referred to by economists as “price discrimination,” raises serious concerns when it impacts American consumers who need to access prescribed treatments.

The $989 price for cancer drug Gleevec in New Zealand jumps to $6,214 in the United States, USA Today recently reported. The article cited data from the International Federation of Health Plans (IFHP), which show the drastic price disparities for prescription drugs “bear no relation to health outcomes.” And then there’s a promising new cancer drug that costs $143,000 a year in Japan and will cost U.S. patients 18 percent more to access the same treatment.

A new article from The Cheat Sheet digs deeper into the IFHP data and reveals a disturbing trend of outrageous prices hurting U.S. patients. For example, the average monthly price of Enbrel to treat autoimmune diseases is $1,017 in Switzerland. But in the United States, that same drug costs $2,225. Patients taking Copaxone for multiple sclerosis pay $862 in England, while the drugmaker charges patients in the United States an astounding 353 percent more, or $3,903!

The list goes on and on. Nexium for acid reflux is $23 in the Netherlands but soars 834 percent to $215 in the United States. Cymbalta for depression, anxiety, and fibromyalgia is $46 in England but $194 here.

Health plans protect consumers from the vast majority of treatment costs for high-priced prescription drugs, but that protection can only go so far as drugmakers continue to drive prices higher and higher.

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