The American private health care system is inefficient.
The U.S. has higher health care costs than any other country.
We spend over 15% of our total economic output each year on health care — roughly double what the U.K. spends.
Medicare currently spends about $50 billion a year on prescription drugs.
Why are prescription drug costs so high?
Drug companies usually point to the cost of research. Some people say that taking a drug all the way from initial discovery to market is considered harder than putting a man on the moon. There are considerable costs involved in that process.
The media usually responds with figures showing that the companies spend more on marketing than they do on research. And this is true, too.
PhRMA, the industry lobbying group, released a 2013 report showing that drug companies spent an estimated $48.5 billion on R&D in 2012. The most current figures they have (from the early 2000′s) show the cost of developing one drug is about $1.2 billion.
Intellectual property rules involving medication in the U.S. make prescription drugs much more expensive than in other countries. Americans spend roughly 10 times more than they need to on prescription drugs as a result of these intellectual property standards.
For a patient with cancer, the bill for medications alone can escalate to nearly $300,000, a price tag that doesn’t include fees charged by a doctor or a hospital.
What is the solution?
For the American public, it is hard to know that the solution is. The majority of Americans cannot afford their medications, and their insurance plans won’t cover them. For those on Medicare, the solutions are a little more clear cut, although Medicare doesn’t cover everything.
Many people are turning to other countries, either traveling out of the USA in order to obtain prescriptions, or else going online to purchase meds through unverified sources.
The truth is that the problem is going to get worse before it gets better.