What happens when we get sick? Most of the time, it results in us taking some type of medicine. For example, if we get a simple cold, we might take some cough syrup or something else, right? However, what you may not have known is that the United States actually uses more medicine and pharmaceuticals than any other country in the world. The United States is the biggest market for pharmaceuticals. The United States doesn’t have the biggest population in the world, nor does it have one of the sickest populations in the world. But, this doesn’t stop us from using medicine and pharmaceuticals at alarming rates. The United States pharmaceutical market was actually set to have a total revenue of 484.4 billion dollars In 2018.

So why does the United States spend so much on Pharmaceuticals? Well, in order to figure out how this happened, we need to go back to the beginning. Drug prices for the United States actually were on par with other wealthy countries before the 1990s. However, during the 1990s, there was a massive boom in drugs being produced in the United States. The increase in drugs being approved by the FDA might have been a cause that led to us being so involved in the pharmaceutical industry. In 2006 the United States had a 52 billion dollar pharmaceutical industry, and in 1997 that industry was only six billion dollars. So we can see that there was a massive growth in just nine years. Now the United States spends about $1,000 per capita on pharmaceutical spending, which is almost twice the amount spent per capita by Germany and France.

Another theory that can lead to the United States spending much more on pharmaceuticals than a lot of other wealthy nations and more than any other nation is how our healthcare system is set up. The US healthcare system is actually quite different from other Health Care Systems out there. The United States healthcare system is a polycentric, politically fragmented system, whereas a lot of other systems for wealthy countries like Germany and England are self-governed healthcare systems. Now what this means is that the United States healthcare system is centered around a lot of different political organizations. As we know, Medicaid and Medicare are created by the federal government but are administered by the states. Now, one of the problems that we’ve seen over the years with the United States healthcare system is that many people find it just too expensive to enter. For example, in Baltimore, many of the people around Johns Hopkins and other hospitals in that area find it much too expensive to be able to enter the healthcare system. It requires them to take arduous bus rides all around the city to get what they need, and that’s not even counting how much it costs. Taking a look at how much the US pays for their pharmaceuticals, we can see that the prices are a lot more than that of other countries because the prices are taken care of by market competition. When we look at Germany or England, the prices are negotiated by physician groups and insurance companies or in Germany by the sickness funds. However, in the United States, they leave pharmaceutical prices up to whatever the market decides. Now, while pharmaceuticals are very expensive in some regards, a lot of over-the-counter medication is actually very cheap. Now, I know this seems a bit contradictory. However, over-the-counter medications like ibuprofen or acetaminophen are generally what people may take whenever they feel some sort of sickness. Now, this leads to pharmaceuticals being the first thing people turn to for healthcare. This is something that only is seen in the US, in terms of wealthy countries, because a lot of other wealthy countries have healthcare systems that leave primary care providers as the first access point for people. Because the US doesn’t have primary care providers as the first access point for those seeking healthcare, you can turn to pharmaceuticals instead, which can explain why we spend so much on pharmaceuticals.

In the future, the United States must be able to change how much we spend on pharmaceuticals. Pharmaceuticals themselves are life-saving substances that can help people get through diseases, but we shouldn’t be spending as much as we do on them. The problem isn’t with expensive drugs being bought at record rates, But the problem is that most people turned to medication as the first place to get healed. And this is where the problem lies.

Sources

15 Astonishing Statistics and Facts about U.S. Pharmaceutical Industry. Pharmapproach.com. (2020, November 21). https://www.pharmapproach.com/15-astonishing-statistics-and-facts-about-u-s-pharmaceutical-industry.

Frakt, A. (2018, November 12). Something Happened to U.S. Drug Costs in the 1990s. The New York Times. https://www.nytimes.com/2018/11/12/upshot/why-prescription-drug-spending-higher-in-the-us.html?utm_source=pocket-chrome-recs.

Simon F. Haeder Assistant Professor of Political Science. (2021, January 25). Why the US has higher drug prices than other countries. The Conversation. https://theconversation.com/why-the-us-has-higher-drug-prices-than-other-countries-111256.