Guess, who, oh who, had higher rates of health care spending increases from 2000-2009? No, it was not the United States, it was the United Kingdom(Great Britain or England) and Canada. Do we really want to be like the United Kingdom and Canada?
Graph 7.1.2
http://www.washingtonpost.com/blogs/...-one-sentence/Forbes:
Cancer is the second leading cause of death (so I am not cherry-picking some obscure, irrelevant metric), yet cancer patients live longer in the U.S. than in any other country in the world.
Despite our having many more uninsured, cancer screening rates for adults 50 and older are much higher in the U.S. than in Europe.[3]
And if we think that doctors are responsible for lifestyle choices such as smoking, then shouldn’t they get credit for the fact that adult smoking rates are much lower here than in any of the other G7 countries?[4]
The U.S. population is one third smaller than that of the European Union and Switzerland combined. Yet we have produced approximately 50 percent of what experts have designated as the top medical innovations. Likewise we are responsible for more of the top pharmaceutical innovations.[5]
“Drug Prices in the U.S. are, On Average, 50% Higher Than in Other Developed Nations."
Like so many other American health care myths, this has a germ of truth. Americans generally do pay more for drugs on patent than other nations in the G7 do. But what Mr. Brill forgot to tell us is that Americans routinely pay less—often much less—than our counterparts do for generic and over-the-counter products. For example, the Japanese (whose health spending as a percent of GDP is the lowest of all the G7 nations) face prices for generic drugs that are twice those paid by Americans, while for over-the-counter medications, the prices are more than three times as high.[9]
Fierce price competition in the U.S. and greater regulation elsewhere (among other factors) help drive the U.S. advantage in generic medication prices. Generics account for 70 percent of pharmaceuticals by volume (though only 20 percent by sales). When we take a weighted average of prices paid for prescription drugs—that is a “market basket” of medications that reflects what share is for brand name and generic pharmaceuticals—Americans pay about the same prices as the Japanese. U.S. prices relative to Germany, UK and Canada are about one-third higher, not 60 percent. More importantly, once we taken into account the higher income of Americans, U.S. drugs are more affordable than in Japan, Germany and Canada. Among the G7, only Italy and the UK have more affordable drugs than in the U.S. (by about 6-7 percent).
So why don’t we let fierce competition (or government monopsony, which is what Mr. Brill recommends) drive down the prices of patented pharmaceuticals? Because it’s a really bad idea! Remember, we have designed our patent system to stimulate discovery and innovation. We give innovators a time-limited monopoly on pricing to encourage, in this example, pharmaceutical companies to invest the $1 billion it takes to bring a single drug to market.[10] To all appearances, this has worked remarkably well. As noted earlier, the U.S. accounts for more of the top pharmaceutical innovations than the EU and Switzerland combined even though the latter countries have a population that is two-thirds bigger.[5]
For example, John Vernon has calculated that if pharmaceutical prices in the U.S. were regulated as they are currently regulated, on average, outside the U.S., the result would be a decline in industry R&D of between 23.4 and 32.7 percent. This would be tragic for the average American. If we measure health gains and mortality reductions in monetary terms, the estimated return-on-investment in pharmaceutical research is 18 percent![11]
Who would want to kill or cripple this golden goose? To put this in terms of human lives, economist Benjamin Zycher has calculated that permitting Medicare to negotiate pharmaceutical prices would result in the loss of 5 million life-years annually! The well-respected consulting firm Lewin Group likewise has the drug price controls/regulatory regime in Europe produced delays in introducing statins(NDXUFan: Do not agree on statins, waste of money) that have led to the loss of literally tens of thousands of lives over a five year period.[12]
And for what it’s worth, the Congressional Budget Office long ago examined the impact of giving the Secretary of HHS authority to negotiate Medicare drug prices. CBO concluded that any federal budget savings would be negligible as “the Secretary would be unable to negotiate prices across the broad range of covered Part D drugs that are more favorable than those obtained by PDPs under current law.” Thus, Mr. Brill’s claim that Americans could save $94 billion through government-controlled drug prices appears seriously off the mark. In reality, Americans will never pay the same drug prices as other countries for the same reason that first class passengers will never pay the same prices as those flying standby. Airlines can offer deep discounts to get the last few seats filled only because others have paid enough the fixed costs to get the plane off the ground. This basic understanding of the difference between marginal and average costs seems to have eluded Mr. Brill’s grasp.
http://www.forbes.com/sites/chriscon...-costs-part-1/NDXUFan:
Even Brill admits that many countries have a much higher health care spending increases than the United States. In fact, once that higher than average violent deaths in the United States are taken into account, the United States leads the world in life expectancy.
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