The cost of global medicine
No matter where you are in the world, the cost of the drug you buy will be starkly different from that of the same drug elsewhere in another country.
Hard to believe right?
Well, if you are wondering why and curious about the impact this may have on you, a family member, or friend, then read on as we attempt to divulge the core reasons behind this discrepancy within this article by Pacific Prime.
Medbelle’s Medicine Price Index 2019 study
In the latest study by Medbelle, the digital healthcare platform conducted research on the accessibility of the world’s best hospital systems. The study, by and large, provides a comparative index across 50 countries, revealing the differences in cost of 13 of the most widely recognized and indispensable medicines, including Lantus (Insulin Glargine), which is used to treat type 1 and type 2 diabetes; Zestril (Lisinopril), which is used to treat high blood pressure; and Xanax (Alprazolam), which is used to treat anxiety and panic disorder.
What were the findings?
All in all, there were significant findings to comprehend from the study.
Most expensive countries for medication
- In terms of the overall most expensive countries for medication, the US came first, costing +306.82 percent more than the global median. This was followed by Germany (at +125.64 percent), the UAE (at +122.03 percent), and Italy (at +90.36 percent).
Least expensive countries for medication
- The countries ranking as the least expensive for medicine were Thailand, which had a -93.93 percent deviation from the global median, Kenya (at -93.76 percent), Malaysia (at -90.80 percent), Indonesia (at -90.23 percent), and India (at -73.82 percent).
Why are drug prices in the US the highest?
The simple answer is that the US allows drug makers to set their own prices for a given drug product. In other words, the US government does not regulate or negotiate the prices of new prescription drugs when they come to the market, as it happens in many other countries, including Thailand. As a result, when those drugs do come to market, the costs are extortionate and beyond the reach of many citizens.
In addition, another significant reason lies beyond just regulations and negotiations and that is the drug makers themselves.
In February, the US Congress requested the presence of executives from seven of the world’s largest pharmaceutical companies and asked them: why do drugs in the US cost so much?
The drugmakers’ answer was that America bears the huge cost of research and development for the rest of the world. They stated that if Americans stopped paying such high prices for drugs, investment in innovative treatments would steeply decline.
As a result, this would reduce investment in their research and development and so hinder their abilities to unearth solutions to some of the hardest problems like Alzheimer’s disease. This would be detrimental to the population of sufferers around the world and those of the future, as their drug treatment options may become limited.
Why are drug prices in other countries lower than the US?
When compared to other countries like Thailand, the opposite is true. Thailand’s Ministry of Commerce is responsible for the regulation of drug prices and meets with pharmaceutical companies to negotiate appropriate drug prices for the country’s healthcare market.
How does it work?
In Thailand, drug prices are set and controlled by the Department of Internal Trade, Ministry of Commerce.
Representatives from the Ministry of Commerce and Public Health, insurance associations, the private hospital association, and the Foundation for Consumers and National Health Security Office form the committee for regulating drug prices.
The committee would typically make important decisions about whether new drugs from these pharmaceutical companies represent any improvement over the old or existing drugs.
They would typically review, thoroughly, the reams of evidence about the risks and benefits of the new drug presented. Ultimately, their overall decisions help to regulate the price of drugs to ensure that medical treatment remains affordable for all citizens, regardless of income. The practice also gives them better leverage when negotiating with drug companies and so increases the competition among suppliers to present the best price.
Do drug costs influence international health insurance premiums?
According to the latest 2019 Cost of International Health Insurance Report, prescription drug costs are the primary driver for high prices of medical plans in countries like Canada. The rise in prescription drug costs falls under one of the five core drivers of International Private Medical Insurance (IPMI) premiums, namely, the increased cost of healthcare.
The other four drivers are:
- Increased demand for international quality private care
- Increased regulation
- Increased challenges with fraud regulation
- The rise of insurtech
How to avoid paying out of pocket for expensive drugs
When it comes to insuring yourself and your loved ones, it is best to think about how an IPMI can help cover expensive medical costs wherever you are in the world. If you are an expat living in a country far from home; planning to go abroad to turn over a new leaf; or are constantly on the move between countries with your family, then securing an international health insurance plan will help ensure that you and the family are completely protected from costly medical bills.
Contact us today for more information!
His expert view and wealth of knowledge on insurance can also be found in his blogs for China, Dubai, Hong Kong, and Singapore.
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