What’s Behind Sky-High Drug Prices in the U.S.

Feb 12, 2024

A U.S. Senate Committee led by Bernie Sanders questioned CEOs of three of the biggest pharmaceutical companies about the high drug prices. Sanders used the opportunity to point out that the companies charge much higher prices here in the U.S. than for the same drugs in other countries.

For example, Johnson & Johnson charges $79,000 a year in the U.S. for its arthritis drug Stelara and only $16,000 in Britain; Bristol Myers Squibb charges $7,100 a year for its anti-blood-clotting drug Eliquis here, but only $900 in Canada and $600 in France. The drug companies charge more than three times as much for brand-name drugs in the U.S. on average as in 33 other industrialized countries, according to a recent report by the U.S. Department of Health and Human Services.

Some Republicans were quick to claim Big Pharma must charge high prices to pay for developing important new medicines. This, of course, is a bunch of hooey since the drug companies historically have taken almost three times as much of their income as profits and for marketing and administration as they’ve spent in research and development, according to a study from Boston University. A U.S. House Committee reported that the largest drug companies spent 57 billion dollars more on stock buybacks and dividends to benefit their stockholders than on Research and Development from 2016 to 2020.

It’s interesting that Sanders and the Democrats choose to bring up the issue of high drug prices right now, smack-dab in an election year. They’re playing up the fact that Medicare and Medicaid will finally be able to negotiate prices with the drug companies because of Biden’s Inflation Reduction Act. Those prices still must be negotiated, and whatever prices the government and the corporations agree to still won’t go into effect until 2026, assuming it even happens.

Even then, Medicare and Medicaid only cover part of the population, so what’s to stop Big Pharma from charging high prices to other insurers and the uninsured to make up the difference?

If other industrialized countries pay less for drugs, it’s partly because they all have some form of national health care, unlike here in the U.S. That’s a result of past fights their working classes have fought to get more universal health care. That’s not to say their medical care is perfect, either. To get the best medical care possible, workers here and in other countries need to fight to take profit out of medical care altogether.