DRUG COSTS: Study Alleges ‘Naked Price Gouging’ In U.S.

      Eight drugs that treat a host of mental illnesses such as schizophrenia and depression cost up to six times more in the United States than in Europe, a study by the consumer group Public Citizen finds. The study investigated the cost to pharmacists of five antidepressant and three antipsychotic drugs in the United States, Mexico, Canada and 14 European countries, finding that in each case the price in the United States was the highest, "often by a wide margin." For example, the report found that the U.S. price for a month's supply of the antipsychotic drug clozapine (Clozaril, Novartis) was $317.03, six times higher than the $51.94 charged in Spain. A month's supply of fluoxetine (Prozac, Lilly) costs $72.16, almost three times higher than the $25.93 charged in Spain. The study authors attribute the price discrepancies to pharmaceutical companies' effort to extract large profit margins from the U.S. market. Since the other nations studied have national health care systems, the other governments can "negotiate drug prices, while in the U.S. consumers are left at the mercy of the pharmaceutical companies who charge what they like," said Public Citizen's Health Research Group Director Dr. Sidney Wolfe (Public Citizen release, 7/15).

The American Way?
      The pharmaceutical industry offered another explanation for the price differential: "Our companies take on the extraordinary risk of drug discovery because the American free-market system offers incentives and potential rewards," said Alan Holmer, president of the Pharmaceutical Research and Manufacturers of America (PhRMA). Holmer added that "some of the price differences may be a result of the newly strengthened position of the U.S. dollar, and differences in the costs of living in the countries studied" (Tye, Boston Globe, 7/16). The Public Citizen study authors counter that "some of the newer drugs (e.g. risperidone, clozapine) were developed by European pharmaceutical firms and yet the cost differential ... is as great or greater for these drugs than it is for those drugs, such as fluoxetine, that were developed in the U.S." (study, 7/15).

NAMI Weighs In
      In a press release today, the National Alliance for the Mentally Ill said it is "gravely concerned" about the study results. "Thousands of American families affected by severe mental illnesses ... have watched hopefully as a new generation of more effective treatments has become available. However, hopes and dreams are dashed when consumers and families learn of a promising new drug only to find out that the medication is not covered by their health insurance company and that they cannot afford to purchase it themselves," NAMI said (NAMI release, 7/15).