“So right now, I’m paying $15,000 a year for this medicine, which costs in the United States $53,000 a year which I feel is… at best, criminal,” father Jon Yeagley told CBS News correspondent Tony Dokoupil early February 2019. (1)
Yeagley has been taking an expensive 6.5 hour trip north of the border every three months to purchase a prescription for his son’s condition. But he says the time and money invested pales in comparison to what it would cost him in his own country.
“There’s no reason why an American should pay three times what somebody in Canada or Europe or Mexico has to pay,” he says. (1)
Yeagley’s 21-year-old son suffers from a condition that causes hair loss. He’s been fighting it since middle school and has tried several treatments, but only one seemed to be effective for him: the prescription that his health insurance refused to cover.
“To my son, the medicine is priceless… I mean, it’s given him an entirely new identity… I believe it has meant everything to him. It’s made a tremendous difference in his personality and his well-being,” Yeagley explains. (1)
So why is there such a significant difference between the two price tags?
CEO of ClearHealthCosts.com, Jeanne Pinder told CBS, “Prices can vary a lot. The same medication could be $8 at one pharmacy and $58 down the street. You just don’t know until you ask.” But this is more of a statement of fact, not any explanation for what many call unfair prices. (1) There’s more to the story.
Unlike other developed countries, the United States does not have a government agency responsible for negotiating prescription drug prices with pharmaceutical companies as they emerge onto the American market. (2)
Instead, pharmaceutical companies are left to establish their own prices for American consumers with the thousands of health insurance providers in the country.
Prescriptions can end up being sold with enormous profit margins, even if the same drug being sold in Canada and the United Kingdom has a price tag that’s 1/2 or even 1/10th of the size. (2)
On the one hand, this often means that some drugs are only available in the United States because other countries have not deemed them worth the price for the claimed benefits. Unfortunately, they come at a steep cost.
Economist Craig Garthwaite of Kellogg School of Management explained to Vox why pricey prescriptions might be seen as a magnet for potential investors in healthcare: “As you decrease the potential profits I’m going to make from pancreatic cures, I’m going to shift more of my investment over to apps to just keep the money in the bank and earn the money I make there.” (2)
In other words, Garthwaite thinks that the soaring pharmaceutical market might be seen as the reason healthcare in the United States gets significant funding from investors at all.
But is the appearance of more and more new drugs on the American market worth it if only a select few can actually afford to take them?
And if pharmaceuticals are so profitable, what’s the incentive to invest money in research for preventative care and holistic health?
Jon Yeagley is a wonderful example of a father who is willing to sacrifice anything for the wellbeing of his son. If only the American healthcare system hadn’t let him down in the first place.
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