“We pay by far the very best costs on this planet for prescribed drugs, in some instances 10 instances greater than the folks of another nation.”
Sen. Bernie Sanders (I-Vt.), in an April 30, 2023, interview on CNN’s “State of the Union”
Sen. Bernie Sanders (I-Vt.), whether or not in Congress or as a presidential candidate, has at all times taken strong positions in opposition to the excessive price of prescribed drugs. Since turning into the chair of the influential Senate Health, Education, Labor and Pensions Committee this 12 months, he’s made reducing drug prices a prime precedence.
It’s subsequently not stunning that the senator would, throughout a latest Sunday morning TV interview, rail in opposition to excessive drug costs in the US and examine what People pay with what folks in different international locations should fork over.
“We pay by far the very best costs on this planet for prescribed drugs, in some instances 10 instances greater than the folks of another nation,” Sanders mentioned on CNN’s “State of the Union” final month.
In any case, it’s a common political speaking level. However 10 instances as a lot? That was a little bit of a head-snapper. We determined to test it out.
A Sophisticated Market
We first requested the senator’s workplace for the paperwork to help Sanders’ claims. However our repeated requests went unacknowledged.
So, we began digging round on our personal. What we discovered was that, as anticipated, Sanders was proper in asserting that drug costs in the US usually exceed these in different international locations. The magnitude of the distinction, nonetheless, varies relying on the medicine and the international locations included within the comparability, amongst different components.
And regardless of how the research we examined sliced the information, the drug worth distinction nearly by no means reached Sanders’ acknowledged degree. Nonetheless, consultants advised us his level has advantage. “I believe the quote is heading in the right direction, if a bit imprecise in scope,” mentioned Andrew Mulcahy, a senior well being economist on the Rand Corp., a worldwide coverage suppose tank.
Take, for instance, the oft-cited 2021 study by Rand that discovered, primarily based on 2018 figures, drug costs within the U.S. have been on common 2.56 instances the drug costs in 32 different Organization for Economic Cooperation and Development international locations. These are largely high-income, developed nations. For brand-name medicine, the hole was even greater: People paid 3.44 instances the costs for these medicine, on common. However the reverse was true for generic medicine, for which People paid simply 84% of what folks in different international locations studied paid. One exception: Turkey. U.S. drug costs have been practically eight instances these in Turkey general, and 10.5 instances these for brand-name medicine.
Mulcahy, a co-author of the report, mentioned that though the ratio throughout all medicine sometimes doesn’t attain Sanders’ “10 instances” mark, “for some medicine it will get shut, should you take a look at the producer’s listing worth.”
The producer worth, although, isn’t essentially the very best measure — particularly if the thought is to seize what shoppers are paying.
That’s as a result of it doesn’t mirror the rebates and different reductions negotiated by insurers and pharmacy profit managers that may decrease a drug’s retail worth. Most individuals with medical health insurance are paying costs that embrace these reductions. The Rand researchers used the producer worth, although, as a result of the reductions are confidential and it’s exhausting to quantify how they have an effect on internet costs, the report famous.
Different research have discovered smaller — although nonetheless vital — gaps than Sanders cited. In 2021, the Authorities Accountability Workplace launched a comparative analysis of the prices of 20 brand-name medicine in the US, Canada, Australia, and France. The research, commissioned by Sanders himself, discovered that retail costs have been greater than 2 to 4 instances what they have been within the U.S.
Another analysis, this one by the Peterson-KFF Well being System Tracker, in contrast the costs of seven brand-name medicine within the U.S., Germany, the Netherlands, and the UK, and likewise discovered that some U.S. costs have been roughly 2 to 4 instances as excessive as these in different international locations. However for different medicine the hole was smaller.
The medicine tracked on this evaluation “are typically specialty medicine and costly regardless of the place you purchase them,” mentioned Cynthia Cox, director of the Peterson-KFF Well being System Tracker, who co-authored the evaluation.
As a result of the US doesn’t straight regulate drug costs as many different international locations do, some costs listed here are dearer. In 2019, the US spent $1,126 per particular person on prescribed drugs, together with $963 by well being plans and $164 that individuals spent out-of-pocket, based on a KFF evaluation of OECD information. Spending by comparable international locations was $552 per capita, together with $466 by well being plans and $88 in out-of-pocket spending by people.
Consultants added, although, that worth is just one ingredient that impacts general prescription drug spending.
“If we’re spending extra, a part of that may be as a result of we’re paying increased costs, but it surely additionally may be as a result of we’re utilizing extra remedy,” mentioned Cox.
And Then There Is Insulin
The place Sanders might discover help for his assertion, based on Mulcahy, is in insulin costs. A Rand research achieved in 2020 for the Well being and Human Providers’ Workplace of the Assistant Secretary for Planning and Analysis compared 2018 insulin prices in the US with these in 32 different OECD international locations. Their findings: The typical U.S. producer worth for the standard unit of insulin offered domestically was greater than 10 instances the worldwide worth, $98.70 within the U.S. versus $8.81 within the OECD pattern.
Such statistics have triggered a somewhat partisan rallying cry to deal with drug prices. The worth of insulin has been the topic of congressional hearings, together with one this month convened by Sanders.
In the meantime, capping insulin prices at $35 a month for Medicare recipients was a signature win for President Joe Biden within the Inflation Discount Act. Members of Congress, Sanders among them, wish to slash insulin costs additional. In a press launch asserting a invoice he launched with Rep. Cori Bush (D-Mo.) that might prohibit producers from charging greater than $20 per vial of insulin, Sanders mentioned, “There isn’t a purpose why People ought to pay the very best costs on this planet for insulin — in some instances, ten instances as a lot as folks in different international locations.”
When Sanders mentioned that People “pay by far the very best costs on this planet for prescribed drugs,” he was heading in the right direction. However his “10 instances extra” determine is off. Although that comparability could also be correct for some particular person medicine or courses of medication — and he did mood his remark by saying “in some instances” — it exaggerates general variations in costs, that are usually increased right here however not 10 instances these in the remainder of the world.
A widely known exception is insulin: The worth within the U.S. has been proven to be 10 instances as excessive as in different international locations.
However even this dedication is difficult. Research that confirmed a tenfold unfold in costs for insulin medicine referred to producer costs, which don’t take reductions into consideration. However that’s a deceptive comparability as a result of most individuals don’t really pay producer costs.
Sanders’ assertion definitely comprises components of fact but in addition doesn’t present all the mandatory data or context. We charge it Half True.
Pals of Bernie Sanders, Bernie Sanders on the Issues, accessed Might 8, 2023
Sen. Bernie Sanders, “Bernie Sanders In Line to Chair Influential Senate Committee on Health, Education and Labor,” Nov. 17, 2022
Rand Corp., “Prescription Drug Prices in the United States Are 2.56 Times Those in Other Countries,” Jan. 28, 2021
Rand Corp., “Comparing Insulin Prices in the U.S. to Other Countries,” September 2020
JAMA, “Estimated Savings From International Reference Pricing for Prescription Drugs,” Sept. 10, 2021
Authorities Accountability Workplace, “Prescription Drugs: U.S. Prices for Selected Brand Drugs Were Higher on Average Than Prices in Australia, Canada, and France,” March 29, 2021
Sen. Bernie Sanders, “News: New GAO Study Finds U.S. Pays Two to Four Times More for Prescription Drugs Than Other Nations,” April 28, 2021
Peterson-KFF Well being System Tracker, “How Do Prescription Drug Costs in the United States Compare to Other Countries?” Feb. 8, 2022
Senate Committee on Well being, Training, Labor and Pensions, “News: Sanders and Cassidy Announce Bipartisan Deal to Lower Prescription Drug Prices,” April 25, 2023
Sen. Bernie Sanders, “News: Following Successful Public Pressure Campaign to Lower the Cost of Eli Lilly’s Insulin, Sanders and Bush Introduce Bill to Finish the Job and Cap the Price at $20 per Vial,” March 9, 2023
Senate Committee on Well being, Training, Labor and Pensions, “Full Committee Hearing: The Need to Make Insulin Affordable for All Americans,” accessed Might 8, 2023
Stat, “Disagreements and Digs Upend an Otherwise Bipartisan Hearing on PBM Reform,” Might 2, 2023
Well being Care Value Institute, International Health Cost Comparison Report, July 2022
Interviews with Andrew Mulcahy, senior coverage researcher on the Rand Corp., Might 5 and 10, 2023
Interviews with Cynthia Cox, vp and director of the Program on the ACA at KFF and director of the Peterson-KFF Well being System Tracker Undertaking, Might 5 and 9, 2023
Interview with Lovisa Gustafsson, vp on the Commonwealth Fund, Might 5, 2023