The Health 202: Here’s why it’s a nightmare to lower U.S. drug prices

Whatever President Trump suggests next week to lower U.S. drug costs, don’t forget this cold, hard fact: It’s extremely difficult to make sweeping reforms to a health-care system as piecemeal as ours.

If you’re employed, you might have coverage through your job. If you’re a senior, you have some version of Medicare. If you’re a low-income American, you may qualify for Medicaid. If no insurance is available to you through those avenues, you’ve probably bought subsidized, private coverage through the state-based Obamacare marketplaces. Or, maybe you’re simply uninsured.

Health insurance typically isn’t such a patchwork system in other countries with wealth comparable to the United States. In Canada, Australia and many European nations, the government plays a far greater role in delivering coverage, keeping people’s out-of-pocket costs low — and putting a damper along the supply chain on how much private industry can pocket from medications.

It’s true that spending on pharmaceutical products has been rising just about everywhere in the past three decades, as specialty medicines for complex or rare, chronic conditions such as cancer, rheumatoid arthritis and H.I.V. have become more widely available. But in the United States, average spending on prescription drugs exceeds $1,000 per person per year — a hefty figure compared to, say, the United Kingdom, where it’s $497, or even Switzerland, where it’s $783.

It’s a situation garnering increasing attention from liberals and conservatives alike. Policymakers from Sen. Bernie Sanders (I-Vt.) to Trump to his top health chief Alex Azar have been sounding the alarm that the government and individuals are paying far too much for prescription medicines.

Speaking yesterday at the World Health Care Congress, Azar said action on drug costs is “desperately needed.” He listed several problems he said “plague drug markets” — including high list prices, the government’s lack of negotiating tools, rising out-of-pocket costs for consumers and other countries “free-riding” off the investments of U.S. companies in developing high-cost specialty drugs.

Trump proposed a smorgasbord of policies in his 2019 budget aimed at tweaking prices downward. But Azar hinted the president may suggest bolder reforms in his speech next week, although he didn’t provide specifics.

“HHS is currently working with the president on a comprehensive strategy to solve these problems,” Azar said. “We’ll be building on the proposals in the president’s budget, but he wants to go further.”

– Washington Post

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