Why do Americans spend so much on pharmaceuticals?

2014-02-08_08-50-52The United States spends almost $1,000 per person per year on pharmaceuticals. That’s around 40 percent more than the next highest spender, Canada, and more than twice as much as than countries like France and Germany spend. So why does the U.S. spend so much? Is it because Americans take more medicines or because they pay higher prices? Can Americans afford the drugs they need? And will the Affordable Care Act change anything?

SOURCE:  Why do Americans spend so much on pharmaceuticals? | Updates | PBS NewsHour | PBS.

This is a very interesting article so I encourage you to click on the source to see the whole thing. For that reason I am only giving you a brief additional words. It sounds like there are multiple reasons why we spend so much more on drugs than the rest of the world. In a nut shell here are some of the reason I gleaned from the article:

  • Overall we are less healthy due to a lifestyle choices and our methods of applying healthcare.
  • We have more money to spend than most others and we spend it on drugs, both legal and illegal it seems.
  • The same drugs cost us 50-60% more on average than anyone else.
  • Drug companies get a much higher profit here than in most of the rest of the world.
  • We are more neurotic than the rest of the world.

It seems obvious that this list is also the reason why our overall healthcare costs are also so much higher than the rest of the world. That and our insistence that we will not implement universal single payer healthcare as much of the rest of the world has long since accomplished.

12 thoughts on “Why do Americans spend so much on pharmaceuticals?

  1. In my wife’s experience as a physician, two of the reasons you cite are among the most pernicious: we are a very unhealthy population (shockingly overweight and sugar- and fat-addicted) and we are subsidizing other countries by paying “full freight” for pharmaceuticals while they obtain large discounts for the same drugs…


  2. I wrote a reply but it disappeared when I hit Post. So, I’ll try again.
    Good article. I agree Americans are not very healthy in general. I think part of the blame should go to advertsing and the media who bombard us with ads and encouragement to see our doctors and “ask” for this or that drug. And if you don’t have an Rx the stores are full of over the counter drugs that are easy to use and abuse…and they’re not all cheap either. We tend to act like sheep sometimes…often actually…chasing the next new thing whether it’s drugs, electronics, cars,…the list goes on.
    Pharmaceuticals are high on my list of greedy and corrupt big businesses. Even the cooking shows and ads tempt us with all manner of rich and trendy dishes. Ooops, I guess I was thinking of myself there 🙂
    Anyway, pharmaceuticals and their political cronies have us in their talons. We need to wake up and resist more.


  3. I seem to always be a fence sitter in my comments lately. Once again, I have mixed feelings about this issue. I have a debilitating and chronic illness. I am vegan and have a BMI on the very low side of normal, and, before being struck with this illness, I jogged, kayaked and mountain biked on single tracks. I was working hard at being the kind of senior who avoided all those avoidable illnesses to which we are so prone in this country. And I avoided many. I need no blood pressure medication, my cholesterol is 147 without medication, and although diabetes is rampant in my family, I have no problems with blood sugar levels.

    Now, in order to function (as in walk, stay upright, get in and out of the bathtub), I require a once-a-week injection of a drug that costs $5,250 per month, according to my latest statement for the shipment just received. It’s a biologic, not available in a generic form. While Europe is working on some biosimilars, that doesn’t appear to be on the horizon here in the U.S. The normal rules for when generics will be made available do not apply to biologics due to the deals that the pharmaceutical companies have made here in the U.S.

    Evil pharmaceutical company, right? Well, except that I happen to know the particular person at that pharmaceutical company who is credited with the development of the medication that I am now taking. I’ve known him for almost two decades, since well before I suspected I would ever need that medication. I’ve known him since my oldest daughter’s marriage, when she married that man’s nephew. I met him as he helped his mother, my son-in-law’s grandmother, crippled a disease that is similar to the one that has struck me, get around at the wedding and reception. He has devoted his entire career to finding a medication that would stop the ravages of auto-immune diseases, and the pharmaceutical company supported that research in the decades it took to find the medication and put it through expensive Phase I, II, and III trials. The company wants recompense because not all such drugs make it through those trials and onto the market.

    So, I’m a fence sitter again. I find myself wondering frequently if I’m worth what I’m costing my insurance company, frustrated with the pharmaceutical company’s fight against biosimilars here in the U.S., grateful for the medication, and respectful of the research (supported by the same company that frustrates me) and knowledge of a man who makes it possible for me to have some semblance of a regular life. No easy answers here.


    1. Please understand that while I use the word “crippled” to describe an action that a disease has taken and not to define a woman who is very dear to me and who, after all, lives with a disease not unlike the one against which I struggle.


  4. Well, as someone whose had her medical care from one of those other countries for a quarter of her life, let me say that the US is unable to bargain with big pharma because it is many small insurance companies rather than a large force. One of the advantages of that socialized medicine thing is that negotiation is a nationwide thing. If enough insurance companies in the US took the same stance at paying pharma as it does on paying say….other bills (my recent doctor visit, the allowed amount was less than one half of the billed amount, in other words, my insurance paid, and the doctor accepted less than one half of the billed amount). We would have a different story.

    The other two issues I see unaddressed are over medication (often for fear of malpractice insurance) and the rush of Americans to get a shot or a pill for every thing. My physician in Germany was the head of his department at the University hospital. Part of my treatments were always holistic and home remedies and antiboitics (for example) were given as a last resort. As someone with arthritis, I was taught how to massage my own knee, walk in a way to put less stress on the knee and a million other things.


    1. Good points, Barb. I’m encouraged that some doctors here in the U.S. are now including holistic treatments, too. My doctors are, at least, but then I sought doctors who would include such treatments as I was still trying to avoid taking any medication at all.


  5. I love the discussions taking place around my posts. That is one of the primary reasons I bog. We should all be questioning things in our lives. That is the only way to make them better.

    I live close to Indianapolis and that this the home of Lilly & Company. They provide a very strong economic base for the local economy. Then there is the Lilly Endowment that has done so much good. But, I certainly recognize that the drug companies like the rest of our capitalist system is very much dominated by profits. It drives almost everything they do.

    I think to one degree or another everyone here is right. It is a multifaceted problem but I kind of lean more toward Barb’s response. We in the U.S. stubbornly refuse to see that a single payer system has much more economic clout than our current hodgepodge system. Why the Republicans in our congress so adamantly refuse to even give Social Security and Medicaid any power in drug purchases is beyond my comprehension.

    Thanks for all the comments. They definitely add value to my post….


  6. The VA and the military do have the right to bargain, and buy from Canada. I have lived military socialized medicine for thirty years. It works. Part of socialized medicine is the inability to sue. That doesn’t mean things don’t get fixed, they do. The lawyers don’t get rich, the problem is corrected.


    1. Thanks for the info Janette. I don’t understand why we have laws that say that it is ok for the military to bargain but not Medicare/Medicaid? I wander what the possible logic behind that is??

      On the law suit thing, yeah that needs to be curtailed but what about that drunk surgeon who kills a dad of two young children. Don’t those kids deserve some sort of financial help that the father would have provided? As you say, we need to get the lawyers out of the blend so that they don’t take half of the compensation. That is grossly immoral to me! but even those lawsuits only make up less than 2% of our annual medical costs it is not really a significant part of reigning in our absurd medical expenses.


  7. RJ – no right to sue does not negate neglect or compensation. When my husband got an infection during a surgery the entire case was reviewed from top to bottom. About a year later he got a check in the mail for a reasonable amount of compensation. He was also informed that certain new steps are now taken to prevent it from happening again.
    No cover up. No losing the hospital because of a multi million dollar settlement. Fix the problem and move forward.

    I don’t know when or why the VA and military got access to cheaper priced drugs. Maybe it is because so many are aided by research out of Bethesda and Walter Reed? You know they experiment on military a lot. I got some hot-off -the -presses inoculations while we lived in Saudi and China. They are still not available in the US (but they are in Canada).


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