Pharmaceutical costs, especially those for brand name, maintenance drugs, have been a primary driver of health costs and, in turn, health insurance costs, for well over a decade.
Interestingly, the costs for these drugs vary widely around the world and are on average 44 percent higher in the United States than elsewhere. Countries with centralized, single-payer health systems are able to negotiate lower prices for drugs than are the myriad of insurance companies in the U.S. However, the lost revenue from lower prices paid by the single-payer countries is simply shifted to payers in the U.S.
Effectively, the U.S. is subsidizing the research and development ventures of the drug companies more than their single-payer counterparts. Given free markets, this is not a sustainable business model.
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