It will come as no surprise to most people that we in the U. S. pay the highest prices in the world for drugs and the reason this continues is largely the lobbying power of Big Pharma. At least one state, Maine, is now trying to do something about this problem (see: State of Maine Vs. Big Pharma: Importing Prescription Drugs to Lower Costs). Below is an excerpt from the article discussing the action that the state has taken:
Americans spend more on prescription drugs each year per person than any other OECD country. Despite its relatively small contribution to overall healthcare spending (11.1%), pharmaceuticals can represent a significant financial burden to individuals leading to concerns about access and adherence. In an effort to curb health expenditures on drugs, the state of Maine recently passed a law allowing residents, state employees, and businesses to import prescription drugs from several countries including nearby Canada. In response, a collection of pharmaceutical industry groups have filed suit against the state, claiming that the law poses a significant threat to the safety of American consumers as well as the financial stability of the pharmaceutical industry....While in the U.S. prices are set through a competitive market, other countries will negotiate prices directly with producers or set price caps. Efforts to change the way the United States works with manufacturers have been attempted in the past, but most have been thwarted or had little impact on increasing costs....[I]t’s pretty obvious why big pharma is worried about the nationwide implications of the Maine law. With the city of Portland estimating that they could easily save $200,000 a year on healthcare costs, the entire state has followed suit. The insurance offered to state workers now offers beneficiaries the ability to get their drugs the same way. The program is run through a Canadian company called CanaRx, which compares prices in Australia, New Zealand, Canada, and the United Kingdom to determine where the lowest price prescription drugs can be found. Enrollees in the plan receive their drugs by home delivery, and the state pays a fraction of the cost it would pay at American pharmacies. Opponents of the law, mostly industry leaders and pharmacists, say the importation practice undermines the ability of American manufactures to offset the expenses of research and development for new drugs.
I don't know enough about the law to judge whether an individual state such as Maine has the legal right to strike off on its own and use the services of CanaRx. However, if it is able to persist in this action, surely other states will follow. That's why the pharmaceutical companies and pharmacists will do anything in their power to stop it. Here's a small glimpse of the lobbying power of the pharmaceutical industry (see: Pharmaceutical lobby):
The top twenty pharmaceutical companies and their two trade groups, Pharmaceutical Research and Manufacturers of America (PhRMA) and Biotechnology Industry Organization, lobbied on at least 1,600 pieces of legislation between 1998 and 2004. According to the non-partisan Center for Responsive Politics, pharmaceutical companies spent $900 million on lobbying between 1998 and 2005, more than any other industry. During the same period, they donated $89.9 million to federal candidates and political parties, giving approximately three times as much to Republicans as to Democrats. According to the Center for Public Integrity, from January 2005 through June 2006 alone, the pharmaceutical industry spent approximately $182 million on Federal lobbying.The industry has 1,274 registered lobbyists in Washington D.C.
I have lost my confidence in Big Pharma's claim that the high prices we pay for drugs is plowed back into drug development. This is not to say that the companies don't spend huge sums on developing new drugs -- it's just that they are not particularly good at it any more, spending huge sums on what they hope will be blockbuster drugs that don't often pan out (see: Meet 2014's Blockbuster Drugs). I view these companies as predominantly marketing organizations that have lost their way in the ethics department (see: Is Big Pharma Addicted To Fraud?).