Healthy Skepticism Library item: 2693

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Publication type: news

Light D, Lexchin J.
US drug prices not Canada's fault, study says
York University 2005 Oct 22
http://www.yorku.ca/mediar/archive/Release.asp?Release=966

Notes:

Ralph Faggotter’s Comments:

A widely held view is the notion that consumers in many countries are getting cheap drugs at the expense of American consumers who have to pay a lot more for their medications.

A recent article in the BMJ ( see www.bmj.com ),co-written by Healthy Skepticism Member Joel Lexchin, thoroughly debunks this myth.

American comsumers should now re-direct their attention to the system whereby prices of medications are determined within their country.

Full text:

US drug prices not Canada’s fault, study says

TORONTO, October 20, 2005 — Canada and other countries are not to blame for higher drug prices in the United States and are not hitching a free ride on American pharmaceutical research, according to a new study co-authored by York University professor Joel Lexchin. Lexchin Joel

The study, which appears in the Oct. 22 issue of the British Medical Journal, was co-authored by Lexchin, an associate professor of Health Policy and Management at York and American Professor Donald Light, of the University of Medicine & Dentistry of New Jersey.

The American government is characterizing other industrialized countries as “free riders” and argues that price controls on drugs in such countries force Americans to pay more than consumers in other countries to fund the research needed to produce new drugs, Lexchin says, but the facts do not back that up.

Light and Lexchin examined reports and statistics from governments, independent sources and the pharmaceutical industries in the U.S., Canada and abroad. They point out, for example, that pharmaceutical companies in the U.K. invest more revenue from domestic sales in research and development than companies in the U.S. Despite this, drug prices in the U.K. are significantly below U.S. prices and company profit levels are robust, the study says.

pills left “Despite the rhetoric, drug companies do not do much basic research. In fact, they spend less than two cents out of every dollar in sales on basic research. They take basic research – for example, from the National Institutes of Health – and apply it to develop new drugs,” says Lexchin. “They don’t need the high prices, given that level of spending.”

Light and Lexchin also cite statistics on America’s share of world sales, its percentage of spending on research and its share of discoveries. Those figures show that – in contrast to a common misconception – pharmaceutical research and development in the U.S. have not produced more than its proportionate share of new drugs.

The article “Foreign free riders and the high price of US medicine” will be available on the British Medical Journal web site, www.bmj.com, on Friday, October 21.

York University is the leading interdisciplinary research and teaching university in Canada. York offers a modern, academic experience at the undergraduate and graduate level in Toronto, Canada’s most international city. The third largest university in the country, York is host to a dynamic academic community of 50,000 students and 7,000 faculty and staff, as well as 180,000 alumni worldwide. York’s 10 faculties and 21 research centres conduct ambitious, groundbreaking research that is interdisciplinary, cutting across traditional academic boundaries. This distinctive and collaborative approach is preparing students for the future and bringing fresh insights and solutions to real-world challenges. York University is an autonomous, not-for-profit corporation.

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For more information, contact:

Janice Walls, Media Relations Coordinator, York University, 416-736-2100 ×22101/wallsj@yorku.ca