A modern-day prescription drug prices riddle
A woman recently went viral after claiming a medication that would have cost her $1,000 out of pocket in the United States cost just $25 when sourced through a Canadian pharmacy from an Indian manufacturer. You can watch the video from her Instagram here.)
Twenty-five dollars.
Ten dollars for the medication.
Fifteen dollars for shipping.
Which means the international shipping cost more than the actual drug.
Naturally, the internet had thoughts.
The post attracted hundreds of comments from people sharing similar stories, including sourcing medications from Canada or India, dealing with insurance denials, and paying heart-attack-inducing prices for prescriptions.
But before we all start screaming into the healthcare-policy void, there’s one important detail missing:
What medication was it?
Now, it’s none of my business (because HIPAA) but it does matter for pricing.
For example, was it a brand-name drug or a generic?
Was it still under patent protection?
Was insurance refusing coverage?
Was there a lower-cost alternative available?
Without those answers, it’s impossible to know whether we’re comparing apples to apples or apples to Teslas.
Still, the story resonated with a lot of people, and that, to me, is the more interesting part. And for that (and because healthcare is super expensive in this country), I applaud the woman for sharing her story. I hope more people share their stories about prescription and healthcare costs.
Why Did This Story Strike a Nerve?
The United States spends more on healthcare per person than any other high-income country.
Yet Americans often have worse health outcomes than people living in comparable wealthy nations, including lower life expectancy, higher maternal mortality, higher rates of chronic disease, and more preventable deaths. (People come on my podcast and talk about these things all of the time.)
Prescription drugs are only one piece of that puzzle, but they’re often the most visible piece.
After all, few things make people question reality faster than discovering that six pills cost more than an upscale weekend getaway.
The India Factor
India is one of the world’s largest producers of generic medicines.
When patents and market exclusivity protections expire, multiple manufacturers can enter the market and compete. That competition can dramatically reduce prescription drug prices.
That’s one reason why some medications can cost far less in countries where generic competition is robust.
Of course, not every drug can be purchased overseas for a fraction of the cost, and not every viral story captures the full picture.
But dramatic international price differences are real. And they should make Americans scratch our heads and ask, “How is that possible?!”
Enter the Pharmacy Benefit Manager
And then we arrive at one of healthcare’s most mysterious creatures:
The Pharmacy Benefit Manager. Or PBM.
I’ve had PBMs explained to me by experts.
Multiple times.
By smart people.
People with PowerPoints.
People who really wanted me to understand.
People who seemed genuinely confident they understood what they were talking about.
And every time I walk away feeling like I accidentally attended a graduate seminar in theoretical physics.
PBMs operate between drug manufacturers, insurers, pharmacies, employers, and patients. They negotiate rebates and discounts, manage formularies, and influence which medications are covered and under what circumstances.
Supporters argue PBMs help lower costs through negotiations.
Critics argue they add complexity, reduce transparency, and may contribute to pricing structures that are difficult for patients (and sometimes even healthcare professionals ) to understand.
Regardless of where you stand, one thing is clear:
The path from manufacturer to patient is anything but simple.
The GoFundMe Problem
Then there’s something that many Americans barely notice anymore:
Medical crowdfunding.
Someone gets cancer, someone needs surgery, someone’s kid becomes seriously ill.
And suddenly there’s a GoFundMe campaign.
A few years ago, I was talking with people from other countries about medical GoFundMes. The concept didn’t outrage them, it baffled them.
Not because their healthcare systems are perfect. Every healthcare system has tradeoffs. But the idea of routinely crowdfunding medical expenses felt foreign.
And that’s worth thinking about.
The Real Story
The most fascinating part of this viral post isn’t whether the medication should have cost $25 or $1,000 or somewhere in between.
It’s how familiar the story felt.
Many Americans have delayed care because of cost, received surprise medical bills, or may have looked at an Explanation of Benefits and thought: “This explains absolutely nothing.”
Many have stayed in jobs they didn’t like because they needed the health insurance.
Many have stood at a pharmacy counter wondering how a bottle of pills became a major financial decision.
That’s why stories like this spread.
Not because everyone understands pharmaceutical pricing, but because many have felt cheated by the system.
We can sequence genomes.
Edit genes.
Send people to the moon.
Transplant organs.
Build artificial intelligence.
Yet somehow the final price of a prescription remains one of modern civilization’s great mysteries.
That’s the part of the story I’d like explained one day.
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Other gems to check out in the blog:
Does the type of olive oil you use matter for your brain?
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