Question

why would a drug manufacturer be willing to sell a drug that is priced high (in relation to its variable costs) in the united states at a low price overseas?

Answer 1

The drugs in United States are priced higher in comparison to other countries because the United States does not try to negotiate or bargain over the price of the drug which is given by the manufacturer. They tend to buy the drugs in the same amount as told and the new prescribed drugs are not negotiated when comes in the market. Where as in other countries this does not happen. Their the country policy is to appoint a government agency who will meet up with the pharmaceutical companies and bargain over an appropriate price which is best for all the population. Now these agencies who are appointed tend to check and make inference if the new drugs which has come in the market has any benefit over the old drugs being used. They also think if it is worthy enough to even bring it in the market itself. They will check over the risks and benefits of the drugs. But the United States government allows the drug manufacturers to set their own amount for the drugs that they manufactured and will let all the drugs which is proven itself to be safe for taking into the market. Hence this is the reason for the higher price tag for the same drugs in the United States than in any other country.