I’m traveling abroad, a trip centered on teaching law school for a week in Istanbul. On the way out of the U.S., I had an asthma attack while walking through the perfume area of a Duty Free store in Atlanta. I had an inhaler, but it was getting low (my inhaler is the red Albuterol inhaler on the left. It costs about $70 or $80 WITH the insurance price. My first stop overseas was in Beirut, Lebanon, where I entered a pharmacy without a prescription. They didn’t have Albuterol but the pharmacist sold me the Lebanese equivalent called Salres. Total price was $5. When I arrived at Istanbul Turkey, I visited a pharmacy and paid less than $2 for their equivalent, “Butalin,” the one in the middle Again, no prescription needed, and the pharmacist assured me that this was an equivalent prescription.
I am now in Madrid. Yesterday, I visited a pharmacy here, no prescription, and they sold me the “equivalent,” the inhaler on the right. Price was 2.5 Euros (about $2.85). I spoke with the pharmacist in Spanish. I told her that in the United States, my inhaler costs about $80 with the insurance rate, $300 without. Her immediate reaction was shock at the price. The she became angry, and asked “What do children do when their families cannot afford the medicine?” I told her that I don’t know, and that it is a terrible situation and that there is no excuse for it.
I know this is an old post but in Australia anyone can purchase Albutrol (called Ventolin here) at a pharmacy, off script, for around $8.50 AUD.. so about $6 US. The cost of medicine in USA is always highway robbery. Mind it is the same in comparison between Seroquel, an anti psychotic medication. In Australia it costs around 10 dollars aussie ($7 USD) for 60 tablets whereas in USA it is $190 USD for 30 tablets
Jacqui – Thanks. Yes, it is “highway robbery” here. Pretend “free market.”
I routinely correspond with dozen or more non-US residents who mock Americans as stupid and point to their own superiority, often using drug prices as proof. I tell them I would like to pay what they do, but if I followed their advice they would be very upset.
There’s a lot of background to this. It takes more than $2 billion to bring a new drug to market, and takes a dozen years. That is double what it was in 2008, because from 2009 to 2017 the Food and Drug Administration was allowed/encouraged to satisfy the lust of regulators to punish the drug companies for their avarice. After investing $2B and a dozen years, the pharmaceutical company sets pricing by market. The US Government will enforce patents, and the U.S. is the most lucrative market. So, the company needs to recover its investment from the U.S.
Whenever a U.S. Drug Company has tried to spread the R&D recovery among all user nations, other nations simply expropriate the patent and make the drug themselves. This includes not only the usual suspects (China, Myanmar) but a number of close allies (Canada, Australia). The cost to produce a marginal dose of a medication is often pennies, and so countries not participating in the cost of R&D get theirs cheap. Pricing is determined by market, by size and cost recovery. If the new XYZ medication standard dose is two pills per day for thirty days, and it is expected to be prescribed 10,000,000 times during the patent period, the U.S. market will have to pay $3.35 per pill for the drug maker to break even. After adding in the cost of marketing, contingency for liability (failure to determine that octogenarian Alaska Natives living on the Space Station while pregnant will have double the risk of liver failure is negligence) and cost of selling, it winds up at $4 per pill. The cost to produce one marginal pill is at most five cents, so in East Absurdia the residents can provide all the profit by paying twelve cents per pill. Thus, the bottle of sixty XYZ pills costs Americans $240 and East Absurdians $7,20. Even our closest allies will simply steal the patent rather than pay for R&D. Global envy of the U.S. ensures that if it tries to enforce its patents in other countries, courts will rule against the U.S. That’s life and its hard facts.
The alternative is never to develop a new drug, or to let other countries develop the drugs and we steal the intellectual property. This isn’t satisfactory because many other countries do not use U.S. standards and the drug is too often ineffective or toxic, or both.
The inhaler could be sold in the US for $30, if Australians were willing to pay $40AUD. Not quite what most critics thought would happen if stupid Americans just followed the example of our smarter non-US brethren.
Nice try. The first pressurized inhaler was invented in France by Sales-Girons in 1858. Salbutamol (Albuterol) was discovered at Allen & Hanburys lab in England in 1966. So, no, the US did NOT do the R&D on either the medication or delivery method for asthma inhalers. There is no excuse for them to cost up to 100x in US vs other countries.
I frequently encounter this issue, typically addressed by foreigners lamenting how stupid Americans are compared to the smarter non-Americans who manage to pay far less for drugs. My response: I would love to pay less for drugs, but the real solution would not please a “smarter” foreigner. Medication pricing is dictated by thieves outside the pharmacy companies.
It costs approximately $2B+ and takes 12 years to bring a new medication to market. It would be nice if everyone benefiting from the medication were to share this cost equally. When that is attempted, the R&D paid for by pharmacy companies is simply appropriated by other countries, none of which is envied to the extent the US is internationally, and none of which is ever held responsible. An attempt is currently underway to reverse this injustice, but it is roundly condemned within the US as “Trump’s Trade Wars.” Culprits include the obvious, China, North Korea, Iran, and the not-so-obvious, Malaysia, Canada, Australia.
The number of doses expected to be sold during the patent period is divided into the cost to bring the drug to market, and produces a base wholesale cost in the US. No other drug market is so large and lucrative. To the base amount is added the cost to manufacture the drug, which is minimal. To that is added the cost to advertise and sell the drug, the overhead of the corporation, and most significantly, the reserve for liabilities.A profit is added, and now you have the price paid by the US wholesaler. The only costs incurred in selling to other markets are manufacturing (pennies), packaging, marketing and selling. A marginal dose then costs $0.15 to include a few pennies in profit for Canada, Australia, etc. In the US, which is also paying for the R&D and liability reserve, the dose costs $12.00.
Yes, it is American stupidity that has allowed this practice to go on for decades, but not because American governments didn’t know how to solve the problem. They simply ignored it, until now. Trump is such an odious creature that, when he tries to force other countries to help share the cost of R&D and of defending against an unforeseen complication in pregnant Inuit octogenarians having prostate surgery at high altitude, it is assumed he’s being an asshole. He has had some success, enabling a reduction in drug prices in the US. This is ignored because he’s in general unlikable, thus all manner of things can be ascribed to him, covering a multitude of damages done to the US by foreign countries and domestic politicians alike. Fortunately, just not for the American consumer, he’s expendable and we should expect things to return to normal following the next election.
This is simply an explanation of what is going on besides the obvious. Details and real information are too difficult to deal with, so a convenient target is blamed for everything. Trump bears responsibility for many things, but this is not one of them. He has actually brought down the cost of new medications by forcing our allies to play by the rules, and by shortening the approval times for generic medications to what they were before the regulatory zeal of the Obama administration doubled it. There are a few other areas in which he has taken beneficial action for the country, but the lynch mob won’t allow public discussion of it.
It seems life is complicated and we can benefit from putting in the effort to understand hard stuff. What a concept.
Bill, there’s a war for your mind, and it looks like it’s been won.
Here’s an excellent activity you can do to prove that 90% of what you’ve spouted is nonsense: Find an example of a western country (one of your ‘allies’) where intellectual property claims haven’t been enforced by a US drug company.
Your an excellent example of someone with an elitist view of the USA. You’ve completely ignored that drugs are developed and researched in other places outside the USA.
You’ve ignored the abhorrent laws enacted in the Bush era to make the use of generics much harder.
You assumed that no one understands the importance of strong IP laws – guess what, it’s not rocket science and it’s understood – even outside the USA, believe it or not.
You’ve been suckered into thinking the worlds at fault for your high medical costs – no, the middle men and politicians in the USA are the fault here. Very much so. It’s pure price gorging abs too many layers of administration.
Should Americans really be paying $150 for an inhaler that wasn’t even developed in the USA, and where IP protections ended over a century ago?
Or are you happy that these companies can renew a patent solely on the change of a propellant?
Nonsense.
Btw, the cost of my inhalers have changed nought between Trump. Don’t even understand why you had to bring him up – clearly you have a nice little narrative for all things Trump and American. Doesn’t make it true.
You actually paid ten times the price of the inhaler in Madrid because you didn’t have a prescription. If a doctor in any public medical center or hospital prescribed it to you, the pharmacist would have charged you only 0.25€. I have bought one today. Same as in the photo.
Wow. That makes my point even stronger. I am so saddened that there are children in the US who need inhalers who go without them because of cost.
Bisto,
I am a retired top-tier global management consultant, it’s my business to know and understand business models and operations models. What I’ve described is accurate for the industry. It’s not guaranteed accurate for every prescription medication. If you believe that my description of the industry’s business model must be applicable to every case or else it’s false, I can’t help you.
I cannot respond to thinly-veiled ad hominems such as “you’re ignoring,” “clearly you have a nice little narrative for all things Trump,” and “are you happy that.” If you wish to bring a verifiable-assertion-supported argument, please do so and I may or may not respond in kind.
Erich, as you know I did medical school and practiced psychiatry in Europe for a short while. I was floored when returning to the US: a friend in Germany, a neurosurgeon, complained about the cost of his malpractice insurance, which covered him and his entire operating team. It was about $300/year. In some specialties in the US. $10,000/month was the norm. The problems aren’t doctors or even most lawyers. It’s the insurance companies.
I asked my primary care physician to show me the entire list of tests and procedures he was required to order in so that his insurance would cover him. It’s very long, very expensive to the patient, and mostly useless. I gave my doctor a notarized statement refusing almost every one of the tests, because I knew they were overkill. See https://onlinelaw.hofstra.edu/blog/the-true-cost-of-medical-malpractice-lawsuits/ for an overview of the malpractice system. The data are telling. Only one of 15 patients injured is ever paid. Five of six patients paid never demonstrated negligence.
The public believes everyone in medicine is wealthy, and they go after deep pockets. Two days ago five manufacturers agreed to pay $26B to settle an opioid class action lawsuit brought by state attorneys general. That’s nearly ten percent of the industry’s revenue, and doesn’t address the primary cause of opioid deaths in the US: fentanyl, made in China and then smuggled across the southern border, hidden among the 180,000 illegal aliens who are welcomed to the US each month.
This issue isn’t as simple as comparing prices.
remind me Bill
When was the last time your government put regulations on the legal profession with regards the claims they can bring before a court ?
I can understand the $26 Billion dollar payout for opiods, what I cannot understand is if addiction is such a massive problem why it seems so few of your governments seem willing to address the issue in a reasoned and responsible manner?
I would not be blaming the refugees or the Chinese
America really needs to stop and take responsibility for the society that they have created.
If I can buy an inhaler for $7 in australia there is no reason for the prices in America
I live in Australia, from memory I paid about $7 for the inhalers over the counter, I don’t need them but being a volunteer firefighter I wanted to put some in our first aid kits.
I am wondering how to get some to a friend in America who does actually need them all the time.
i live in Australia and have been an asthma sufferer since i was 5 years old. Ventolin here you can get for around $10 or you can get the generic brand Asmol for about $7. I was horrified when i went to the US and saw that it costs at least $70. in 2018 i was in Cambodia and my ventolin was getting low and i couldnt find my spare so i went to a pharmacy and bought one over the counter. It cost me $4. Its criminal to see what they charge in America for them
I live in Australia and have suffered from asthma since i was 5 years old. A ventolin inhaler here costs $10 and the generic brand Asmol is $7 and you can buy it over the counter. In 2018 i went to Cambodia and usually take 2 or 3 inhalers with me. I only took 2 this trip and had lost one. so i went to a pharmacy in Siem Reap and showed them my inhaler and bought one from them for only $5AUD. Its criminal what they charge in the US for them and cant imagine how many people die from asthma attacks simply because they dont have or cant afford the right medication
In the UK – £10 prescription charge for any drugs for adults, so £10 each for each inhaler (you’re exempt from the charge if you’ve got a repeat prescription for a chronic problem (ie. a prescription every month or so), you’re poor, old, or a child). but there are many cheap own brand over-the-counter drugs for routine things like antihistamines.