During a recent campaign appearance in front of a Tea Party crowd, as reported by ABC News, Republican presidential candidate Rick Santorum told a mother and her sick son that high drug costs are fair because they are determined by free market forces. It appears that Mr. Santorum doesn’t understand the crisis of prescription drug prices and that the market is failing to price prescription drugs within reach for 10s of millions of Americans.

According to ABC News, “Santorum told a large Tea Party crowd here that he sympathized with the boy’s case, but he also believed in the marketplace,” and that companies wouldn’t be making the life-saving drugs if they didn’t believe they would turn a profit doing so. The former senator from Pennsylvania seemed to be lecturing the American people when he said: “People have no problem paying $900 for an iPad…but paying $900 for a drug they have a problem with — it keeps you alive. Why? Because you’ve been conditioned to think health care is something you can get without having to pay for it.”

In this example, Mr. Santorum seems to make the assumption that people will buy an iPad, but not buy life-saving drugs that they need in the expectation of government aid. While we have a hard time believing that to be universally true, we do lament that Americans often must choose between necessary products such as food, clothing and medicine, and that 10s of millions of Americans cannot afford their medication each year.

But let’s examine Mr. Santorum’s market comparisons – needed medication versus iPads – to show that the prescription drug market is distorted, forcing Americans to go without needed medication. In grave contrast to prescription medication, iPads are very competitively priced in the United States compared to other countries (see Table 1 below).

Table 1

Source: http://www.pcworld.com/article/196006/chart_international_ipad_prices_compared.html.

Brand name prescription medications, on the other hand, usually cost twice as much in American pharmacies than they do in foreign pharmacies. The lowest international online pharmacy prices are often 80% less than those found in U.S. pharmacies — for the same medications. See Table 2: Safe Savings on Popular Brand Name Drugs (Based on 90-Day Supply).

Table 2

Sources: PharmacyChecker.com); Bricks and mortar prices at CVS pharmacies located in New York City (Prices collect between December 2010 and February 2011). + Calculated from price quoted for 60 pills *Calculated from price quoted for 84 pills; ++ Calculated from price quoted for 100 pills.

Why is the price gap so huge between American pharmacies and pharmacies in other countries? Because a free market does not exist in the pharmaceutical industry. Foreign governments control drug prices as part of their overall policy to make sure health care is affordable for all. As a result, the pharmaceutical industry makes most of its profits by gouging the American people with the highest prices. And even though in America, many of our citizens do have access to lower prices through assistance – whether Medicare, Medicaid, or Veteran’s benefits, and of course private health insurance – these “lucky” ones have seen their co-pays sky rocket on brand name medications over the past few years. For the 50 million uninsured (more people than the entire population of Spain) however, cash prices at the local chain pharmacy are often way out of reach!

Looking closer at the specific situation of the aforementioned boy, we note the U.S. and international prices of Abilify, the drug he takes to treat schizophrenia. Here are real world numbers, according to PharmacyChecker.com research from less than one year ago:

At a local U.S. bricks and mortar pharmacy, a three-month supply of Abilify costs $1820.99 (annual cost: $7,283.96). The cost of about 14 iPads!

At a PharmacyChecker verified international pharmacy, a three-month supply of Abilify is $358.20 (annual cost: $1,432.80).

If Mr. Santorum were true to his free market principles then Americans would have access to the lowest possible prices for goods sold domestically or internationally – even if other governments intervene to keep their prices low. That’s right; those are the dictates of free trade theory. However, the U.S. government maintains an unwarranted ban on the personal and wholesale re-importation of lower-priced prescription medication, a form of protectionism for the pharmaceutical industry. In other words, development of new medications, extolled by Mr. Santorum and provided as the justification for high drug costs, are carried out on the backs of uninsured Americans via inflated drug prices. There’s nothing “fair” about the pharmaceutical “free market” in America.