Study Finds Price Gouging in U.S. Prescription Drugs

July 15, 1998

Study Finds Price Gouging in U.S. Prescription Drugs

Americans Pay Double European Prices
for Latest Antidepressant and Antipsychotic Drugs

WASHINGTON, D.C. — American consumers are paying as much as six times more than Europeans for some prescription drugs, revealed a study released by Public Citizen?s Health Research Group today.

The study focused on the cost to pharmacists in 17 countries in North America and Europe of an average 30-day supply for three newer antipsychotics and five newer antidepressants, and found that U.S. costs were by far the highest.

“For all of the eight drugs, the cost in the U.S. was more than anywhere else,” said Larry Sasich, a pharmacist with the Health Research Group and co-author of the study. “The U.S. costs varied from 1.7 times to 2.9 times higher than the average cost in all the other countries. 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. For a year?s treatment, this amounts to $3,184 more in the U.S. than in Spain. For fluoxetine (Prozac, Lilly), the U.S. cost was $72.16 for a month?s supply, almost three times higher than the $25.93 charged in Spain. For a year?s treatment, this amounts to $554 more in the U.S. than in Spain.”

“American patients are being ripped off by profiteering drug companies, and those who can?t afford the colossal prices are often left untreated, with disastrous consequences,” said Dr. E. Fuller Torrey, a Research Psychiatrist with Public Citizen?s Health Research Group and co-author of the study.

Community Mental Health Centers say the skyrocketing prices of some psychoactive drugs are putting a severe strain on community health centers around the country, and the prohibitive costs of the newer medications put them out of reach for some Medicaid programs.

One mother whose son has been diagnosed with schizophrenia says he is taking Haloperidol, a cheaper alternative to the effective Risperdal, despite its severe side effects. “Risperdal offers my son the ability to lead a functional life as opposed to when he is on Haloperidol, but I am continually told that the costs would be too high for him to afford it,” she said.

All of the countries studied, except the U.S., have a national health system. “National health insurance allows other governments to negotiate drug prices, while in the U.S. consumers are left at the mercy of the pharmaceutical companies who charge what they like,” said Dr. Sidney Wolfe, Director of Public Citizen?s Health Research Group.

The study found that even with negotiated prices, companies still make a hefty profit, e.g. a 20 percent profit on all drugs in the United Kingdom. By comparison, 1996 annual net profits for the six U.S. companies for which information was available were $12.3 billion.

The study revealed that Americans would have saved more than $2.1 billion if they had been paying the other countries? average prices for the eight drugs studied.

“Pharmaceutical companies selling in the U.S. have one of the highest profit margins of any American industry, profits which come at the expense of people with severe psychiatric disorders who cannot afford the newer medications,” Dr. Torrey said. “The comparison with other countries exposes the U.S. drug industry?s naked price gouging.”