In the United States, the cost of Revlimid, a brand-name cancer medication, has been rising for two decades and is now approximately $1,000 per pill. In comparison, prices in Europe are consistently lower, sometimes by two-thirds in certain countries.
The issue gained attention when a reporter, after being prescribed Revlimid for multiple myeloma, a form of incurable blood cancer, found the pricing steep. Investigation revealed that Celgene, the manufacturer, had been increasing the price in the U.S. for over a decade whenever feasible. Despite lower prices in Europe, Celgene continued to make profits, adding to over $21 billion in net earnings since Revlimid’s release in 2005.
This disparity in drug pricing is not unique to Revlimid. Generally, Americans face higher prescription drug costs than those in other wealthy nations, often leading to financial strain on patients. The reasons behind these high prices and the potential for change remain under scrutiny.
In most affluent nations, drug prices are regulated by the government, often based on therapeutic benefits and prices in other countries. In contrast, U.S. pharmaceutical companies set their prices with minimal restrictions. Insurers might refuse coverage to negotiate lower costs, but with conditions like cancer, this can lead to public backlash due to the disease’s sensitive nature. Some states require insurers to cover specific cancer medications.
Drug companies argue that high prices in the U.S. reflect research and development expenses, claiming that Americans benefit from early access to innovative treatments. Since its acquisition of Celgene, Bristol Myers Squibb has continued this pricing approach, citing the ongoing clinical value of Revlimid.
Critics, including Dr. Hagop Kantarjian, a specialist from MD Anderson Cancer Center, argue that pharmaceutical firms overstate development costs. Many drug breakthroughs occur in publicly funded academic and hospital labs. According to a Bentley University study, the U.S. National Institutes of Health funded nearly all FDA-approved drugs from 2010 to 2019. Furthermore, large pharmaceutical companies often prioritize dividends and stock buybacks over research investments.
One proposed solution is to align American drug prices with those in other wealthy countries, a measure supported across party lines. A Congressional Budget Office report found this approach could significantly reduce costs. Recently, Senators Josh Hawley and Peter Welch introduced a bill imposing penalties on companies if U.S. prices exceed the average in countries like Canada and Germany.
Former President Donald Trump advocated similar policies, directing Medicare to adopt a “most favored nation” pricing model. However, the rule was blocked in court. Current reports indicate an ongoing push to tie Medicaid and Medicare prices to international benchmarks.
Industry groups oppose such measures, arguing that government-set prices would limit doctors’ and patients’ choices. Alex Schriver, from the Pharmaceutical Research and Manufacturers of America, suggests addressing systemic flaws, including financial flows to intermediaries.
Some critics also caution that international reference pricing could be manipulated and effectively allow foreign governments to determine U.S. drug values. The Trump administration is anticipated to reveal new drug pricing strategies soon, though the White House has not commented on these reports.
