Why Medical Care in America Is So Expensive

Medical care in America is excellent but expensive, with drug costs being no exception to the general pattern. US medical firms are leaders in innovation, but at a high price to consumers, who are increasingly aware that drug costs just over the border in Canada are considerably lower. When challenged on this, especially by the elderly, the drug companies reply that medicine costs a lot in America because it has to: “It’s all that research we do. There is nothing controversial.” No research, no new formulas, no new ingredients, no new drugs, no medical evolution in the critical struggle with high blood pressure, heart disease, liver disease, strokes, cancer and all the other common illnesses and bacteria that can make old age miserable or short.

So is it just laboratory budgets and the salaries of scientists and technicians that explain the high prices? Washington Post editorial cartoonist Tom Toles thinks not. The drug company executive opens the elevator door to the Research Division to show us some busy corporate “researchers”. What are they working on?

The first pointy-headed figure is devising the digital TV ads that are the key feature of the extremely expensive advertising campaigns these firms now use to sell drugs directly to consumers. The second is putting together a selection of “goodies for doctors”—favors and services that will induce (i.e. bribe) physicians to prescribe their drugs regardless of cost. The third figure is studying the fees that companies pay to expensive law firms to fight for extension of patent rights on drugs; patents themselves also tend to keep prices high, in theory to reward inventors for the introduction of a useful new product. Last comes the researcher who studies how much money the firm should pay to the re-election campaigns of politicians in Congress to guarantee that the laws serve the financial interests of the drug industry.

Medical research is pointedly absent. This is an exaggeration on Tole’s part, since these firms really do spend huge sums on science—but promotional and legal expenses are, as Toles insists, far from being neglected.

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