Big Pharma's Dirty Little Secret

The American healthcare system is the best in the world. Or so we are often told. But is it really true?

It is certainly the best system for drug companies, which can charge the highest prices in the world to some U.S. consumers. The Congressional Budget Office has estimated that average prices for patented drugs in 25 other top industrialized nations were 35% to 55% lower than in the United States.

And it is a pretty good system for hospitals, insurance companies and others that deliver healthcare services. Americans spend about twice as much per person for healthcare as do Canadians, Japanese or Europeans, according to the World Health Organization.

But it's not a good system for American citizens. The U.S. has shorter life expectancies and higher infant and child mortality rates than Canada, Japan and all of Western Europe except Portugal, according to the WHO.

I'm a drug company executive who has spent 20 years marketing pharmaceuticals. And I'm troubled. I'm most troubled by the fact that we stick it to the people who can afford it the least.

For instance, elderly people who use a Medicare discount card and have to pay $1,299 annually for a drug that the Department of Veterans Affairs purchases for $322, according to a comparison by Families USA. Or middle-class families that lose health insurance and have to pay $29,500 for an overnight hospital stay, when Medicaid would have paid only $6,000, according to the Wall Street Journal.

It just doesn't make any sense. And, not surprisingly, the companies with the biggest profits -- those in the drug industry -- have been fighting hardest to maintain the status quo.

Our dirty little secret is that the drug industry already sells its products, right here in the U.S., at the same low prices charged in Canada and Europe. It's done through rebates. These are given to those with enough power to negotiate drug prices, such as the VA.

A 2001 study by the consumer advocacy group Public Citizen found that drug companies' favorite customers paid just a little over half the retail price. This leaves the 67 million Americans without insurance to pay cash, with no rebates, at double the prices paid by the most-favored customers.

The fight against re-importation of drugs is a fight to continue to charge our uninsureds full price while giving everyone else a rebate.