High Drug Costs

High Drug Costs

Prices affect consumersFrom Parlamento

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U.S. Drug Prices the Highest in the World and only getting worse

Average Percentage more that Americans pay

for brand drugs then 7 Western Nations

Source: Boston University School of Public Health – October 28, 2004

Based on formulary of 1,000+ patent drugs

2000 60% More

2003 81% More

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Amount U.S. Pays for patented drugs 2003 compared to:

Source: Health Reform Program Calculations from Patented Prices Review Board reports (Trends in Drug Prices and

Expenditures tables) Based on formulary of 1,000+ patent drugs

Sweden

Britain

Germany

Canada

Switzerland

France

Italy

58%

63%

73%

75%

87%

108%

118%

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• Out of control industry marketing

• Industry influence in government

• Quality of care compromised

• Pharmaceutical costs out of control

• Consumers can’t afford their drugs

The Problem

• Industry spends $12B/year on drug marketing to MDs ($13,000/MD)

• 90,000 sales reps (1 for every 5 MDs)

• Gifts, lunches, trips, educational grants, entertainment, free samples

Rx Marketing to Doctors

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• Even small gifts create obligation and influence prescribing decisions

• Free samples create loyalty to brand

• Doctors sometimes paid to promote expensive new drugs and off-label uses

Impact of marketing on prescribing

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• Marketing is 30% of cost of drugs

• Only 10-15% spent on R&D

• Expensive me-too drugs marketed

• 17% of cost increases due to switches to more expensive drugs

• Generics cost 30-80% less

Impact on costs

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Many Americans can't afford to fill their prescriptions

From Feji Fajardo flickr.com