Skip to content
  • About
  • Contact
  • Contribute
  • Book
  • Careers
  • Podcast
  • Recommended
  • Speaking
  • All
  • Physician
  • Practice
  • Policy
  • Finance
  • Conditions
  • .edu
  • Patient
  • Meds
  • Tech
  • Social
  • Video
    • All
    • Physician
    • Practice
    • Policy
    • Finance
    • Conditions
    • .edu
    • Patient
    • Meds
    • Tech
    • Social
    • Video
    • About
    • Contact
    • Contribute
    • Book
    • Careers
    • Podcast
    • Recommended
    • Speaking

It is wrong to subsidize rich, European nations

Peter Ubel, MD
Policy
June 12, 2014
Share
Tweet
Share

People have criticized the Affordable Care Act for amounting to a large transfer of wealth, from wealthy Americans to those not as well-off. But the real transfer of wealth has been from United States to other developed nations, whose health care costs we have subsidized for many years by paying so generously for many of our health care services. No better example of this comes to mind than the price we pay for pharmaceuticals in the US versus elsewhere. Below is a picture of what we pay  for brand-name drugs here compared to peer nations.

Pharmaceutical products are cheaper abroad in part because companies know they can make money in the U.S. market, and thus are willing to tolerate smaller profit margins in other countries.

swiss2

In effect, therefore, we are subsidizing the cost of health care in those other countries. And not just any old countries. Some of the richest countries in the world: like Switzerland and Germany. If we negotiated pharmaceutical prices more aggressively here in the U.S., the pharmaceutical industry might be more reluctant to accept lower prices elsewhere. More likely, lower prices in the U.S. would mean lower profits for the industry. This would undoubtedly have an effect on the willingness of pharmaceutical companies to invest in new products. Nothing promotes research spending better than the promise of future profits. It is worries about such research incentives that have caused some people to argue against negotiating lower prices with pharmaceutical companies. To lower profit margins, they contend, would be to slow down medical progress.

But is it the job of the United States to provide profits to the pharmaceutical industry, so they have an incentive to develop new cures? Is it people in United States who should pay for the majority of this research, simply because our friends in Europe are tougher negotiators?

In the United States, we have a health care cost problem. We spend significantly more money on health care than our peers. And a big portion of this cost problem is a price problem. Our doctors make more money than similarly trained doctors in Europe. Our hospital executives make more money than their peers in Canada. And we pay more money for prescriptions than we would if we lived elsewhere.

It is time to worry less about promoting industry profits, and focus more on controlling health care spending. That means becoming tough negotiators, with hospitals, pharmaceutical companies, device manufacturers and the like. It is wrong to ask the American public to be sugar daddy to Western Europe.

Peter Ubel is a physician and behavioral scientist who blogs at his self-titled site, Peter Ubel and can be reached on Twitter @PeterUbel.  He is the author of Critical Decisions: How You and Your Doctor Can Make the Right Medical Choices Together. This article originally appeared in Forbes.

Prev

Optimize nurse partnerships to improve patient care

June 12, 2014 Kevin 4
…
Next

New skill sets are raising the prestige of primary care

June 12, 2014 Kevin 13
…

Tagged as: Medications, Public Health & Policy

Post navigation

< Previous Post
Optimize nurse partnerships to improve patient care
Next Post >
New skill sets are raising the prestige of primary care

ADVERTISEMENT

More by Peter Ubel, MD

  • Clinicians shouldn’t be punished for taking care of needy populations

    Peter Ubel, MD
  • Patients alone cannot combat high health care prices

    Peter Ubel, MD
  • Is the FDA too slow to handle the pandemic?

    Peter Ubel, MD

More in Policy

  • Bundled payments in Medicare: Will fixed pricing reshape surgery costs?

    AMA Committee on Economics and Quality in Medicine, Medical Student Section
  • Who gets to be well in America: Immigrant health is on the line

    Joshua Vasquez, MD
  • Online eye exams spark legal battle over health care access

    Joshua Windham, JD and Daryl James
  • The One Big Beautiful Bill and the fragile heart of rural health care

    Holland Haynie, MD
  • Why health care leaders fail at execution—and how to fix it

    Dave Cummings, RN
  • Healing the doctor-patient relationship by attacking administrative inefficiencies

    Allen Fredrickson
  • Most Popular

  • Past Week

    • Who gets to be well in America: Immigrant health is on the line

      Joshua Vasquez, MD | Policy
    • Why specialist pain clinics and addiction treatment services require strong primary care

      Olumuyiwa Bamgbade, MD | Conditions
    • Harassment and overreach are driving physicians to quit

      Olumuyiwa Bamgbade, MD | Physician
    • Why peer support can save lives in high-pressure medical careers

      Maire Daugharty, MD | Conditions
    • When a medical office sublease turns into a legal nightmare

      Ralph Messo, DO | Physician
    • Addressing menstrual health inequities in adolescents

      Callia Georgoulis | Conditions
  • Past 6 Months

    • Forced voicemail and diagnosis codes are endangering patient access to medications

      Arthur Lazarus, MD, MBA | Meds
    • How President Biden’s cognitive health shapes political and legal trust

      Muhamad Aly Rifai, MD | Conditions
    • Why are medical students turning away from primary care? [PODCAST]

      The Podcast by KevinMD | Podcast
    • The One Big Beautiful Bill and the fragile heart of rural health care

      Holland Haynie, MD | Policy
    • Who gets to be well in America: Immigrant health is on the line

      Joshua Vasquez, MD | Policy
    • Why “do no harm” might be harming modern medicine

      Sabooh S. Mubbashar, MD | Physician
  • Recent Posts

    • The shocking risk every smart student faces when applying to medical school

      Curtis G. Graham, MD | Physician
    • Clinical ghosts and why they haunt our exam rooms

      Kara Wada, MD | Conditions
    • High blood pressure’s hidden impact on kidney health in older adults

      Edmond Kubi Appiah, MPH | Conditions
    • Deep transcranial magnetic stimulation for depression [PODCAST]

      The Podcast by KevinMD | Podcast
    • How declining MMR vaccination rates put future generations at risk

      Ambika Sharma, Onyi Oligbo, and Katrina Green, MD | Conditions
    • The physician who turned burnout into a mission for change

      Jessie Mahoney, MD | Physician

Subscribe to KevinMD and never miss a story!

Get free updates delivered free to your inbox.


Find jobs at
Careers by KevinMD.com

Search thousands of physician, PA, NP, and CRNA jobs now.

Learn more

View 8 Comments >

Founded in 2004 by Kevin Pho, MD, KevinMD.com is the web’s leading platform where physicians, advanced practitioners, nurses, medical students, and patients share their insight and tell their stories.

Social

  • Like on Facebook
  • Follow on Twitter
  • Connect on Linkedin
  • Subscribe on Youtube
  • Instagram

ADVERTISEMENT

  • Most Popular

  • Past Week

    • Who gets to be well in America: Immigrant health is on the line

      Joshua Vasquez, MD | Policy
    • Why specialist pain clinics and addiction treatment services require strong primary care

      Olumuyiwa Bamgbade, MD | Conditions
    • Harassment and overreach are driving physicians to quit

      Olumuyiwa Bamgbade, MD | Physician
    • Why peer support can save lives in high-pressure medical careers

      Maire Daugharty, MD | Conditions
    • When a medical office sublease turns into a legal nightmare

      Ralph Messo, DO | Physician
    • Addressing menstrual health inequities in adolescents

      Callia Georgoulis | Conditions
  • Past 6 Months

    • Forced voicemail and diagnosis codes are endangering patient access to medications

      Arthur Lazarus, MD, MBA | Meds
    • How President Biden’s cognitive health shapes political and legal trust

      Muhamad Aly Rifai, MD | Conditions
    • Why are medical students turning away from primary care? [PODCAST]

      The Podcast by KevinMD | Podcast
    • The One Big Beautiful Bill and the fragile heart of rural health care

      Holland Haynie, MD | Policy
    • Who gets to be well in America: Immigrant health is on the line

      Joshua Vasquez, MD | Policy
    • Why “do no harm” might be harming modern medicine

      Sabooh S. Mubbashar, MD | Physician
  • Recent Posts

    • The shocking risk every smart student faces when applying to medical school

      Curtis G. Graham, MD | Physician
    • Clinical ghosts and why they haunt our exam rooms

      Kara Wada, MD | Conditions
    • High blood pressure’s hidden impact on kidney health in older adults

      Edmond Kubi Appiah, MPH | Conditions
    • Deep transcranial magnetic stimulation for depression [PODCAST]

      The Podcast by KevinMD | Podcast
    • How declining MMR vaccination rates put future generations at risk

      Ambika Sharma, Onyi Oligbo, and Katrina Green, MD | Conditions
    • The physician who turned burnout into a mission for change

      Jessie Mahoney, MD | Physician

MedPage Today Professional

An Everyday Health Property Medpage Today
  • Terms of Use | Disclaimer
  • Privacy Policy
  • DMCA Policy
All Content © KevinMD, LLC
Site by Outthink Group

It is wrong to subsidize rich, European nations
8 comments

Comments are moderated before they are published. Please read the comment policy.

Loading Comments...