In his Feb. 5 Business column, “ Trump’s very brief crusade to lower drug prices ,” Steven Pearlstein wrote that in “just about every other facet of the American health system, drug pricing is impossibly opaque,” but Mr. Pearlstein left out an important consideration. Given the current hand-wringing over high prices for drugs, the full weight of accountability is levied on manufacturers. The markups applied by retail outlets as products move through the supply chain are not discussed. According to Consumer Reports , a one-month supply of generic Singulair can be purchased at Costco for $21 and at Rite Aid for $144.
When Mr. Pearlstein mentioned that Americans pay “roughly twice what patients in other countries do for the most widely used drugs still under patent,” he ignored that in countries such as Denmark, Britain and France, the research and development components of pharmaceutical and vaccine industries are subsidized. In return, these countries operate systems of profit regulation that constrain prices to yield no more than a target overall rate of return on capital.
The pharmaceutical industry serves as a poster child for all that is wrong in health care. But in 2014, the Generic Pharmaceutical Association reported that of the 4.3 billion prescriptions written in the United States, 88 percent were for generic drugs. These drugs are the end result of patents. Meanwhile, Tufts University researchers found in 2014 that it takes longer than a decade and nearly $2.6 billion to develop a new prescription medicine that gains FDA marketing approval.
Jeremiah Norris, Washington
The writer is a senior fellow at the Hudson Institute.