More Proof: US Health Care Prices Are Totally Insane

By Vandita

Many people who were baffled with Martin Shkreli, the price-gauging Pharma CEO, for raising the price of a life saving drug by more than 5000%, asked why the government watches in silence even as Big Pharma make a killing off sick people. The answer is – drug companies are a powerful lobbying force in Washington. Period.

According to the Center for Responsive Politics, drug companies have spent $2.3 billion on lobbying and $183 million on campaign contributions since 1998. The ready money serves as a strong deterrent against any legislative proposal that would lower costs for consumers and profits for the drug makers.

American spending on drugs has more than doubled since 2000, rising from $121.2 billion then up to $271.1 billion in 2013. Pharmaceutical companies have especially high profit margins — not just for the health-care sector, but for any sector. Pfizer, one of the country’s biggest drug companies, ran a 42 % profit margin in 2013.

One of Hillary Clinton’s first major policy proposals is to curb the price of prescription drugs by allowing Medicare to negotiate drug prices. Currently, Medicare is barred from this type of negotiation; so long as the Food and Drug Administration approves a treatment, Medicare has to cover it at the price demanded by the pharmaceutical company. However, in Europe, Canada, and Australia, governments view the market for cures as essentially uncompetitive and keep health care services affordable.
The International Federation of Health Plans (IFHP) in 2014 released its 2013 Comparative Price Report, detailing its annual survey of medical prices per unit. Designed to showcase the variation in healthcare prices around the world, the report examined the price of medical procedures, tests, scans and treatments in nine countries. The latest data from IFHP, an industry group representing health insurers from 28 countries including the United States, shows that American patients pay the highest prices in the world for a variety of prescription drugs and common medical procedures like childbirth. A proof that Americans are overpaying for health care…

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