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Explain why Americans pay twice as much for health care

Most politicians in Washington are busy debating the Iran nuclear deal or playing presidential politics. So, it was encouraging last week to see public pressure to address rising drug prices and health care costs.

Recent attention has focused on big price increases for some specialty drugs, including $1,000-a-pill hepatitis C treatments as well as drugs to treat some cancers, cystic fibrosis and multiple sclerosis.

There is growing resolve in Congress and elsewhere for drug companies to reveal their costs — research and development costs as well as marketing costs.

More transparency would be helpful, but the industry will no doubt try to block any moves by Congress to peek behind the curtain of big pharma companies.

Any attention paid to U.S. health care costs is welcome, and long overdue. When the so-called Affordable Care Act was passed five years ago, not enough reform addressed the fact that the United States spends nearly twice as much on health care, on a per-capita basis, as other advanced countries. The U.S. spends about 18 percent of gross domestic product on health care — other countries are closer to 9 percent.

Despite the attention, drug prices amount to about 10 percent of total health care costs. Hospital stays account for 32 percent and physicians and clinical services represent 20 percent.

Still, it’s well known that Americans pay more for prescription drugs than people in other countries. It’s also well known that when Congress passed the Medicare Part D program for prescription drugs, it prohibited the federal government from bargaining for better drug prices — something that happens in most other countries.

That prohibition made clear that the pharmaceutical industry essentially wrote the Part D legislation. The lack of effort to control drug prices in the ACA further demonstrates the pharmaceutical industry’s lobbying power in Washington.

Part of the problem can be traced to the very human response that finds most people saying health care costs must be reduced, but when it comes to treatment of a family member or friend, no cost is too great.

Some of the drugs getting the most scrutiny in Congress are some cancer drugs that extend lives by only a few months, but cost $100,000 a year.

Studies have shown that multiple sclerosis drugs that used to cost about $10,000 a year are now priced at $60,000 a year, despite the new drugs being introduced into a competitive market.

Drug company defenders point to the cost of developing drugs that never make it to market. That’s a valid point, and those costs must be considered. Drugs that do make it to market then have to produce profits to cover the development cost of failed drugs. In general, the industry seems to have no restraint on drug pricing — and for that reason Congress should demand transparency.

A professor at Harvard Medical School quoted in the New York Times was correct when he commented about the mounting pressure to reduce drug prices by saying the industry “has brought this on itself by charging prices that are so astonishing, it makes citizens wonder, ‘Where did this figure come from.’ ”

Drug prices are only part of the overall health care spending picture. So any effort to control drug prices should be extended to other costs, including medical devices, hospital stays and the fee-for-service approach to compensate doctors.

There is no defense for Americans spending twice as much for health care as citizens in other advanced countries. Nobody in Washington has explained, or justified, the big price premium that Americans pay for health care. High costs were given lip service by President Obama and ACA supporters in Congress, but no real reform targeted cost control. The high percentage of America’s GDP spent on health care is unsustainable and hurts the country economically.

Calling the health care reform law the “Affordable Care Act” is ironic, with costs often not affordable. Washington is unwilling or unable to bring down costs because it’s been captured by the health care industrial complex.

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