Ed Schoonveld Discusses List Prices for Pharmaceuticals in the US Compared to Other Countries


In an interview with Pharma Commerce Editor Nicholas Saraceno, Ed Schoonveld, Value and Access Advisor, Schoonveld Advisory and author of The Price of Global Health, explains why pharmaceutical products tend to cost more in the US than the rest of the world.

PC: You recently penned your latest byline for the April issue of Pharma Commerce. Without giving too much away, what does it discuss?

Schoonveld: The congressional hearings led by Bernie Sanders were a reason to pick up the topic of drug pricing again, which continues to be a big issue in the US. So I felt I needed to comment on that, and I'm calling it "In Search of the 'Bad Guy.'" I really think that we keep searching for the bad guy, but maybe there's no bad guy, maybe we just have a societal issue. That's a topic that goes very near and dear to my heart that I talk about in this article as well.

PC: Why are US list prices for prescription drugs often higher than in other countries, and what should be done to lower these prices?

Schoonveld: We need to distinguish between price and cost to the patient. Prices have gone up as technology has gone up, but prices to patients have gone up much more than that. Insurance companies have shifted more of the cost to patients, so they've become more sensitive to it. That's problematic, particularly when patients can't afford it. Yes, cost has gone up, but technology has advanced. As a matter of fact, drug cost has not gone up more than other health care costs. It's still at a constant 12% to 13% over the last 20-25 years. That still can make it a problem, of course, for an individual patient and that's where we need to focus. Why is it more expensive than let's say, for example, Europe? Well, that's a bit of a double edge. In Europe, governments are controlling price. Some say we should control price as well. But you know, when somebody steals my car, the answer is not to steal somebody else's car. I just think that government should probably help the industry more. I'm using an example in my article of the UK, where the dollar value of a drug has not gone up, not adjusted for inflation in 20 years. So I think we need to just keep a good look at what's happening in other countries and why the prices are so high in the US. Now when you when you're talking purely economically, it's not optimal to have every global citizen pay the same price for a product. It is economically optimal to adjust it by affordability. If we insist that prices in the rest of the world are just as high as in the US, particularly in poor countries, nobody would be able to buy it, so it would stay on the shelf. That means that the US would have to contribute more to the overhead costs. So prices would actually have to go up more here. I know that's not a happy answer, but economically speaking, we are better off to have drugs priced at affordability in each country so that each individual can contribute towards the overall cost of R&D, medical infrastructure, etc. So if we could just stop looking for the bad guy and look at the issue, I think we would be much better off.

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