ECONOMY & WORK
MONEY 101
NEWS
PERSONAL FINANCE
NET WORTH
About Us Contact Us Privacy Policy Terms of Use DMCA Opt-out of personalized ads
© Copyright 2023 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.
MARKETREALIST.COM / ECONOMY & WORK

Take a Look at the Report That has Sparked a Debate Around Pricing of Pharmaceuticals

Other nations typically pay far less for medications, mostly because their governments often determine the cost.
PUBLISHED FEB 11, 2024
Cover Image Source: Drugs | Pexels | Photo by Pixabay
Cover Image Source: Drugs | Pexels | Photo by Pixabay

Senator Bernie Sanders' recent report exposing a glaring contrast in the prices of three major drugs between the United States and several other countries, has once again turned the spotlight toward the pharmaceutical industry. It has reignited a debate around the affordability of healthcare.

Image Source: Pexels|Photo by MART PRODUCTION
Image Source: Pexels | Photo by MART PRODUCTION

It sheds light on cases such as that of Bristol Myers Squibb’s Eliquis, a blood thinner reducing stroke risk, which has an annual list price of $7,100, but is priced at $940 in Japan, $900 in Canada, $770 in Germany, $760 in the UK, and $650 in France.

Moreover, Johnson & Johnson’s arthritis drug Stelara listed at $79,000 annually in the US, is priced at $30,000 in Germany; $20,000 in Canada; $16,000 in the UK; $14,000 in Japan; and $12,000 in France.

The growing need of healthcare and the industry has urged entrepreneurs to come up with new and helpful ideas|Pexels
Image Source: Healthcare fraud | Pexels

These disparities have fueled outrage, prompting Sanders to convene a hearing with the CEOs of the implicated drugmakers before the Senate Committee on Health, Education, Labor, and Pensions, which he chairs. This move, intended to hold the pharmaceutical giants accountable, highlights the urgency of addressing the issue. For the first time, Medicare is engaging in direct negotiations with drug manufacturers, targeting ten expensive medications, including Eliquis and Stelara.

Sanders is also hinting at the possibility of issuing the committee's first subpoenas in over 40 years to compel Johnson & Johnson and Merck executives to testify.

While the negotiation process doesn't factor in prices paid in other countries, it symbolizes a potential shift towards fairer pricing practices within the US. 

Image Source: andresr/Getty Images
Image Source: Photo by Andresr | Getty Images

The Biden administration, along with Sanders and other advocates, has long decried the gaping disparity between drug prices in the US and those in other developed nations. Former President Donald Trump also attempted to address this issue by advocating for a "most-favored-nation price" policy, aligning Medicare payments with those of other countries. However, such initiatives have faced opposition and challenges along the way.

Furthermore, list prices, which often dictate insurance premiums and out-of-pocket expenses, pose a significant financial burden, particularly for those without adequate coverage.

Drug makers fear that price negotiations could stifle innovation by undercutting profits. They contend that reduced revenue streams could hamper investment in research and development, potentially impeding the discovery of new life-saving medications. However, the Senator's report highlighted that in 2022, Johnson & Johnson and Bristol Myers Squibb allocated $17.8 billion and $12.7 billion, respectively, towards stock buybacks, dividends, and executive compensation.

In contrast, their investments in research and development amounted to $14.6 billion and $9.5 billion. However, Merck demonstrated a different approach by investing nearly double the amount in research and development compared to dividends and executive compensation. Critics counter this by adding that exorbitant profits, coupled with substantial spending on stock buybacks and executive compensation, suggest a prioritization of financial gain over genuine societal concerns.

Representative Image | Getty Images | Photo by Spencer Platt
Image Source: Getty Images | Photo by Spencer Platt

The staggering profits amassed by pharmaceutical companies, primarily in the US market, also raise questions about the ethics of prioritizing profit margins over patient access to essential medications. The contrasting difference in pricing further underscores the need for systemic reforms to ensure equitable access to healthcare for all.

MORE ON MARKET REALIST
The 51-year-old has been a part of the show for many years and fans absolutely love him.
20 hours ago
Steve Harvey's expression after hearing the answer was worth a million dollars.
21 hours ago
The contestant seemed to have an oddly detailed plan for disposing dead bodies.
23 hours ago
The artwork from the guest's grandfather, Henry Siddons Mowbray was too important for him to let go.
1 day ago
The pawn shop owner took a chance on the item being authentic and it worked out well.
1 day ago
The only name that the host was familiar with throughout the round was Cinderella.
1 day ago
Kevin O'Leary teamed up with another shark to make the offer after the two fought for a deal.
2 days ago
The contestant had his priorities sorted even though his answer didn't find many takers.
2 days ago
The guest said that he had purchased it for $750, about 15 years ago, which was way too much money.
2 days ago
Thankfully, none of the cast members will be changed and fans are excited about the changes.
3 days ago
The guest even had the signature authenticated, but it did not fetch him what he wanted.
3 days ago
The host then brutally trolled one of the contestants for a mistake he refused to see.
3 days ago
The sharks were baffled that the entrepreneurs did not even have a plan to become profitable.
4 days ago
The contestant's answer made the host single him out in the most hilarious manner.
4 days ago
The host even gave justification for the contestant's shocking answer.
4 days ago
The host's hilarious expression after hearing the absurd answer will surely go down in the game show's history.
5 days ago
The guest hoped to getv $1,500 for it but was only offered a couple hundred bucks.
5 days ago
The old man wanted the car to be painted black as well, which would have cost a lot of money.
5 days ago
It seemed like she was going to win the car and some more after almost nailing the game.
6 days ago
While the founder of Hampton Adams got a $500,000 offer, he chose not to go for it.
6 days ago