The price of being sick in America

RAND Corporation 2024 cross-country comparison: US brand-name drug prices average roughly 3× the prices in 33 OECD comparison countries. For the top-selling 30 drugs the multiple is closer to 4×. Generic prices are roughly comparable across countries; the gap is concentrated in branded and biologic medicines. The pattern is consistent across cancer, diabetes, autoimmune, and cardiovascular categories. The same molecule, made in the same plant, costs Americans 3× what it costs Germans.

GoodRx / KFF: a vial of Humalog (insulin lispro) listed at ~$98 in US pharmacies in 2023, vs ~$12 in Canada and ~$4 in Mexico. The same Eli Lilly product, often manufactured at the same facilities. The Inflation Reduction Act capped Medicare insulin co-pays at $35/month starting 2023; private-insurance and uninsured prices remained unrestricted until late 2024 voluntary commitments by Lilly, Novo Nordisk, and Sanofi. The 1922 patent on insulin was sold for $1 by its inventors with the explicit intention that no one should profit from a life-saving drug.

Mylan/Viatris EpiPen list price: ~$700 for a 2-pack as of 2024. The same product (epinephrine auto-injector) lists at <$100 in the UK, Canada, Australia, and most EU countries. The molecule is more than a century old; the patent on epinephrine itself expired in the 1940s. Mylan acquired EpiPen rights in 2007, raised the list price ~600% over the next decade, and triggered the 2016 Senate hearings. Generic versions exist but are still 5-10× peer-country prices because of US-specific FDA bioequivalence requirements and PBM rebate structures.

KFF Health Tracking Poll (2024-25): about 1 in 3 US adults report not filling a prescription, skipping a dose, or splitting pills in the past 12 months because of cost. The number rises to 40%+ for adults under 50 with chronic conditions. KFF and CDC have run consistent versions of this question since 1997; the cost-related non-adherence rate has not meaningfully fallen despite ACA expansion or the IRA. Skipping medication has measurable downstream costs: hospitalisation rates among diabetics who ration insulin run ~30% higher than peers, per JAMA Internal Medicine 2022.

The Inflation Reduction Act capped annual Medicare Part D out-of-pocket prescription costs at $2,000 starting January 2025. It is the first such ceiling in the program's 20-year history. Before the cap, ~1.5 million Medicare beneficiaries paid more than $2K out-of-pocket per year (HHS analysis); cancer patients and MS patients on specialty drugs frequently paid $10K+. CBO projected the cap will save Part D enrolees ~$7.4B per year in 2025 alone. The cap is paired with the $35/month insulin co-pay cap (effective 2023) and the price negotiations that take effect 2026.

OECD Health Statistics 2024: per-capita prescription-drug spending was $1,432 in the US, the highest figure of any OECD member. The next-highest peer (Switzerland) was $1,032; Germany $912; UK $626; Mexico $250. The US gap accounts for roughly half of the total US-vs-peer healthcare-spending gap. The empirical claim that higher US prices fund global pharma R&D is partly true (the US is ~45% of global pharma revenue) and partly a deflection: marketing spend exceeds R&D spend in most major firms (next section).

BMJ 2020 analysis of 35 major pharma companies: 64% spent more on marketing and sales than on research and development. Pfizer in 2022: $13.4B sales/marketing vs $11.4B R&D. J&J 2022: $25.0B sales/marketing vs $14.6B R&D. The "we need high prices to fund innovation" argument is partly an industry frame; the larger US-vs-peer price gap funds advertising directed at US consumers (the US and New Zealand are the only two OECD countries that allow direct-to-consumer prescription-drug TV advertising) and corporate operations.

Cleary, Ledley et al. (PNAS 2018): every one of the 210 new molecular entities approved by the FDA between 2010 and 2016 had received NIH or other public-sector research funding at some stage of development. NIH cumulative funding for the basic research that produced those drugs totalled $100B+. The "private innovation" narrative obscures that private pharma typically takes over after public funding has de-risked the early-stage research. Subsequent profits accrue to private firms; the public taxpayer-funded foundation is rarely credited.

The US and New Zealand are the only OECD countries that permit direct-to-consumer television advertising of prescription drugs. US pharma DTC spending: ~$8 billion per year (Kantar 2023). Every European peer bans the practice on the reasoning that physicians, not patients, should be the audience for prescription-drug marketing claims. The "ask your doctor about" segment of US TV ad inventory is roughly 5× any other OECD ad category. The US carve-out dates to a 1997 FDA rule change that loosened the prior restrictions.

Standard US drug patents run 20 years from filing, typically about 14 years of post-launch market exclusivity. The I-MAK patent database documents 'evergreening' strategies that extend that exclusivity. The 12 top-selling drugs in 2023 averaged 73 patents per drug across slight reformulations, dosage changes, delivery-method tweaks, and combinations with other compounds. AbbVie's Humira had 247 patents, extended its exclusivity from 2003 to 2023, and generated $200B in lifetime US revenue before generic biosimilars finally entered the market.

CDC: approximately 700,000 Americans have died from opioid overdose since 1999. The crisis has unfolded in three waves: prescription opioids (1999-2010, OxyContin and similar), heroin (2010-2013, as prescription supply tightened), and fentanyl (2013-present, now causing ~75% of overdose deaths). The first wave was created by prescription patterns that Purdue Pharma and other manufacturers had aggressively promoted, including ProPublica-documented misrepresentation of OxyContin's addiction risk to physicians and the FDA in the 1990s.

Purdue Pharma, owner of OxyContin, was sold to a public benefit corporation in a 2021 bankruptcy reorganization. The Sackler family agreed to pay $8 billion to settle thousands of state and municipal opioid suits and was granted broad legal immunity from future opioid claims. Court filings (ProPublica documented the trail) showed the family had moved approximately $11 billion out of Purdue to personal accounts in the years leading up to bankruptcy. Net family position: ~$3 billion ahead, plus the immunity. The Supreme Court rejected the bankruptcy structure in Harrington v. Purdue (June 2024); the case is being relitigated.

Cumulative settlements as of 2024 across J&J, Teva, Allergan, Endo, McKesson, Cardinal Health, AmerisourceBergen, Walmart, CVS, and Walgreens: roughly $50 billion paid or agreed. Most settlements include conduct restrictions but no admission of wrongdoing and no executive-level criminal liability. Three Purdue executives pleaded guilty to misdemeanours in 2007 and paid personal fines totalling $34M. No senior pharma executive has served prison time for the prescribing patterns that produced the crisis. By comparison: ~700,000 deaths.

Compare the prosecution rate to the 1980s S&L crisis (1,000+ executive felony convictions including bank CEOs) or to the 2008 financial crisis (zero, also). The pattern is consistent: corporate civil liability is routinely paid by shareholders and customers; individual executive criminal liability is essentially never assessed for choices that produce mass harm. The 2007 Purdue misdemeanour pleas (R. Sackler, M. Friedman, H. Udell) were the closest the system came; the punishments were fines and probation.

OpenSecrets: pharmaceutical industry federal lobbying spend totalled $378 million in 2023, the largest of any single industry, more than oil and gas, defence, or finance. PhRMA (the trade group) led with ~$28M; Pfizer, Roche, and Eli Lilly each spent $9-12M. The industry employs ~1,800 federal lobbyists, more than three per member of Congress. The lobbying corps includes more former members of Congress than any other industry. Both parties take pharma money in roughly equal proportion.

The Medicare Modernization Act (2003) created Medicare Part D drug benefit. Section 1860D-11 (the "non-interference" clause) explicitly barred the federal government from negotiating drug prices on behalf of Medicare beneficiaries. The ban held for 19 years. The clause was inserted by then-Representative Billy Tauzin, who left Congress within months of passage to become PhRMA's president at a $2M+ salary. Every other developed country negotiates drug prices via single-payer or bulk-purchaser systems. The 2022 Inflation Reduction Act finally restored that authority for 10 drugs effective 2026, expanding to 60 by 2029.

Inflation Reduction Act (August 2022) authorised Medicare to negotiate prices on 10 high-spend drugs (Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, Fiasp/NovoLog) starting 2026. Initial CMS negotiations produced 38-79% price reductions vs prior list. Industry sued in 8 separate venues; courts have so far upheld the IRA negotiation authority. The bill reaches 15 additional drugs in 2027 and 20 each subsequent year. By 2029, ~60 drugs would be subject to negotiation, vs the unrestricted negotiation that has existed in every peer country for decades.

OpenSecrets / Public Citizen: 65%+ of registered pharma lobbyists are former federal-government employees (Capitol Hill staff, executive-branch employees, former members of Congress). Average annual compensation for a senior former-Member pharma lobbyist: $1-3M, vs $174K for a sitting Member. Billy Tauzin is the canonical case but not unique: Joe Crowley, Heather Podesta, Tom Daschle's firm, and many others. The pipeline operates in both political directions and has held steady for decades.

Three pharmacy benefit managers (CVS Caremark, OptumRx (UnitedHealth), Express Scripts (Cigna)) processed approximately 80% of US prescription drug claims in 2023. All three are vertically integrated with major insurers and pharmacy chains. PBMs negotiate rebates from drug manufacturers in exchange for formulary placement; the rebates are largely retained by PBMs rather than passed to patients. The pricing structure produces the perverse outcome that higher list prices often produce larger rebates and therefore preferred formulary placement, incentivising list-price growth.

FTC 2024 PBM Interim Report: approximately $700B per year in prescription drug spending flows through the PBM tier in the US system. The amount each patient pays at the counter, the rebate paid by the manufacturer, and the spread captured by the PBM are all confidential per contract. The FTC is the first federal agency to mount a comprehensive PBM investigation; the 2024 interim report catalogued anti-competitive practices the agency has not yet acted on. State-level transparency laws have proliferated since 2019; effects on prices are mixed.

The 340B Drug Pricing Program (1992) requires manufacturers to sell drugs at discount to hospitals serving low-income populations. The original goal was to "stretch scarce federal resources" for safety-net providers. By 2023, 340B participation had grown to ~50,000 entities, including for-profit hospital chains that meet the eligibility criteria on technical grounds. HRSA estimates the discount programme moved ~$54B in drugs in 2022. Studies (Conti & Bach, JAMA 2014; Desai & McWilliams, JAMA 2018) find evidence that 340B revenue is not consistently used to expand low-income care. The structure has become a cost shift between manufacturers and hospitals rather than a poverty-reduction programme.

46brooklyn / Drug Channels analyses: of the gross rebates and fees PBMs negotiate from drug manufacturers, an estimated $80-110 billion per year is retained by the PBM tier rather than passed through to insurers and patients. The pass-through rate varies by contract and is rarely disclosed. Legislative proposals to require 100% pass-through (the Lower Costs, More Cures Act) have been introduced in every Congress since 2018; none has passed. The scale of the retained revenue is roughly equivalent to total US OTC drug sales.