Different Prices for the Same Thing: Everybody Does It

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  • 01/09/2006

Why do people think it unacceptable for research-based drug makers to charge different prices in different countries? Even in the absence of price controls (which most countries impose on medicines), this is a common practice.

As a San Franciscan with a serious addiction to skiing, I make the trek almost every weekend to Lake Tahoe. I just got back from two days skiing at Northstar-at-Tahoe, where a single day pass costs $63 if you buy it at the base of the mountain. Fortunately, I had a voucher that gave me a lower price of $41: a 35% discount! Imagine my surprise when I learned that people in Reno had been able to buy tickets for just $20, only for January 8. So, people skiing the same mountain, the same day, payed very different prices.

Sure, I was upset that some people from Reno paid less than I had, but I did not ask the government to force the ski resort to charge me the same price. If I had succeeded in doing so, the ski resort would have responded not by reducing the price to me, but increasing the price to the skiers from Reno.

I hear you say: “Hey, your scampering off to ski is not the same as seniors who cannot afford life-saving drugs,” which is true. Nevertheless, the behavior of the suppliers would be exactly the same. Legalizing the international piracy of prescription drugs will cause drug makers to raise prices abroad, not cut them in the U.S.

Policymakers who advocate this piracy need to explain why the law should uniquely forbid drug makers from engaging in this normal business practice.


Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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