Outrage of the Month: Prescription-Drug Price Gouging in U.S. Fuels Big Pharma’s Revenues

Health Letter, November 2021

By Michael Carome, M.D.

outrage

If you’re not outraged,
you’re not paying attention!

Read what Public Citizen has to say about the biggest blunders and outrageous offenses in the world of public health, published monthly in Health Letter.

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Image: Cagkan Sayin/Shutterstock.com

For decades, pharmaceutical companies have charged American patients exorbitant prices for prescription drugs that far exceed what consumers in other comparable high-income nations pay. Unaffordable drug prices have led millions of patients in the U.S. to ration their medications to make ends meet.

A new report published by Public Citizen on Sept. 30, 2021, provided a glimpse of how much Big Pharma benefits from the American health care system overpaying for drugs. The report found that for the 20 top-selling drugs worldwide combined, pharmaceutical company revenues from U.S. sales in 2020 were almost double the total revenues for the rest of the world. Specifically, sales of these 20 drugs in the U.S. totaled $101 billion, whereas sales for the rest of the world totaled only $57 billion.

For 17 of these 20 top-selling drugs, company revenues from U.S. sales exceeded sales revenue from all other countries in the world combined. For 11 of these drugs, U.S. sales revenue was at least twofold greater than the revenue from sales in the rest of the world.

The most striking examples of the drug-sales revenue disparities in 2020 between the U.S. and the rest of the world documented in Public Citizen’s report were the following:

  • Sales revenues for Gilead Sciences’ antiviral combination HIV medication containing bictegravir, emtricitabine and tenofovir alafenamide (BIKTARVY) were five times greater in the U.S. than in the rest of the world.
  • Sales revenues for AbbVie’s widely used autoimmune disease drug adalimumab (HUMIRA) were four times greater in the U.S. than in the rest of the world.
  • Sales revenues for Eli Lily’s type 2 diabetes drug dulaglutide (TRULICITY) and Amgen and Pfizer’s autoimmune disease drug etanercept (ENBREL) in the U.S. were more than triple the revenues in the rest of the world.

The report further documented that for 11 of the 13 pharmaceutical companies marketing these 20 top-selling drugs, most of their revenue from these drugs came from U.S. sales. For example, AbbVie brought in more than $20 billion total in U.S. sales for its top-selling Humira and cancer drug ibrutinib (IMBRUVICA) — nearly four times more than the combined sales of the same two drugs in the rest of the world.

“This eye-popping rip off Big Pharma is getting away with is an insult to the American people,” said Rick Claypool, a Public Citizen research director and co-author of the report.

The higher prices drug companies charge American consumers compared with what they charge consumers in other countries is primarily due to the U.S., unlike most other high-income countries, not negotiating prices for drugs.

A large majority of Americans support giving the federal government the authority to negotiate drug prices for Medicare beneficiaries, as well as consumers covered by private insurance. For example, a recent poll conducted by the Kaiser Family Foundation found that 83% of all adults — including 91% of Democrats, 85% of Independents, 76% of Republicans and 84% of seniors — favor such action.

To help stop Big Pharma’s price gouging in the U.S., Congress must listen to the American public, ignore the pharmaceutical industry’s high-paid lobbyists and finally pass legislation granting Medicare the authority to negotiate drug prices.