Without reform and tougher enforcement, prescription drugs will continue to be a major reason that the United States spends much more on health care costs than any other country with worse outcomes.
A Journal of the American Medical Association study showed that spending per capita for prescription drugs was $1,443 in the U.S., compared to a range of $466 to $939 in other countries.
According to the study, the U.S. spent twice as much on health care than ten other high-income countries in 2016, largely because of the high costs of prescription drugs as well as administrative overhead and labor. It spent nearly 18 percent of its gross domestic product (GDP) on health care in 2016, compared to other countries from 9.6 percent 12 percent of GDP.
But the spending doesn’t result in better health outcomes: Life expectancy in the U.S. is 78.8 years, compared to the average of 81.7 years among the countries studied; Infant mortality was higher; and the U.S. has more uninsured citizens than any of the countries examined, with about 10 percent lacking insurance coverage.
More legal enforcement could also help curtail illegal but profitable pharmaceutical activities. But unfortunately, the trend seems to be heading toward less enforcement.
Criminal penalties against pharmaceutical companies that engage in illegal activities have plummeted in recent years while prosecutions of executives of these companies remain extremely rare, and both must be increased to deter future unlawful behavior, according to a new report by Public Citizen.
The report’s most striking finding is that federal criminal penalties against pharmaceutical companies have dropped precipitously since 2013. In 2016-2017, federal criminal penalties totaled just $317 million from four settlements. This represents a nearly 90 percent plunge in financial penalties compared with 2012-2013.
“Not only must the government hold accountable individual executives, but it must impose meaningful penalties on their companies,” said Dr. Michael Carome, director of Public Citizen’s Health Research Group and co-author of the report, in a statement. “Such efforts would go a long way toward eliminating fraud as a business model within the pharmaceutical industry, a model where crime does in fact pay.”
Financial penalties continued to pale in comparison to company profits, with the $38.6 billion in penalties from 1991 through 2017 amounting to only 5% of the $711 billion in net profits made by the 11 largest global drug companies during just 10 of those 27 years (2003-2012).
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