Thursday, January 07, 2010

Price of Drugs

We have a lot of people up in arms in this country about the price of prescription drugs.

They say, "We should pay the same amount of money for a pill in America that people in Ghana pay for the exact same pill."

We no actually you shouldn't because that pill reflects different costs.

1.) We are a bunch of litigation happy bastards in this country, if drug company A makes you a pill and it has a side effect you don't like, perhaps it makes your breath bad, turns your teeth black, kills you etc. If you are American you are probably going to sue. Maybe even trigger a class action lawsuit that will seek billions from Company A. What happens in Ghana? not the same thing. The risk in selling in our market is much greater and it is reflected in the price.

2.) Have you ever walked into a drug store in a foreign country? Bought some Viagra or pain relievers in Mexico? Did you need a prescription? Did they need to enter it into a huge computer system? Verify it with insurance companies? How many people were working behind the counter? Chances are you asked and you received said Viagra pill. All of the overhead, regulation and delivery systems in this country add to costs.

Basic economics.

Until you remove or reduce the barriers to supply and demand the pill will never be the same price. To make it the same price means everything becomes equal between the two places or something is being subsidized and we are just creating more headaches that are already more expensive for us to cure.

The fact that the same pill is cheaper in another Country is not that Countries fault. It is not the drug makers fault. It is our fault.

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