Why are drugs so cheap in Mexico? I was just down there with a group of friends and they always go to Walmart to stock up. One girl bought 4 inhalers and saved $700. Not everything is that dramatic but everything is cheaper.
Drugs in Mexico might actually be closer to a capitalist market for drugs than either here or Canada.
What we're seeing with medical services and drugs in this country is the result of decades of government intervention. Beginning with the tax breaks for employer-paid medical insurance after the Second World War, and continuing with many state and federal mandates on medical care and with Medicare and Medicaid, we no longer have anything resembling a healthy economy for medical services.
We see the same thing, by the way, with the costs of higher education.
For example, I had an ingrown toenail fixed, in the doctors office, a few years ago. It took him about 30 minutes, total, and some scissors and bandages and chemicals. He charged me $500, figuring my insurance would pay it. When he saw that I carried a $1000 deductible, and would have to pay the $500 out of pocket, he instantly lowered his fee to $130. The $130 was a fair fee, in my estimation, for what that would have cost, in a competitive and healthy market for such services. He has to charge the $500 when he can get it, to cover the situations in which he gets far less, and he can charge the $500 because the system is corrupt. If my auto mechanic wanted to charge me $500 for 30 minutes work to put on some new tires, I wouldn't even give him my business in the first place. But medical services aren't bought for what the buyer figures is a fair price up front.
This is the essential way that they are selling Universal Health care to us.
First make the healthy capitalist medical system not work, with prices rising constantly faster than inflation.
Then offer to fix (what they broke) it (by breaking it worse.)
Drugs are now priced hundreds or thousands of times the cost of their actual production. This is not needed to research new drugs. Other markets that require enormous R&D, such as the computer, automotive or airplane industries, don't allow for this sort of price distortion. That's because they are still basically healthy capitalist markets.
Unfortunately, we have less chance of getting rid of employee funded health insurance, Medicare, Medicaid and a raft of federal regulations and big pharmaceutical controlled federal agencies than we do getting rid of the Income Tax.
Because the high prices for drugs in the US subsidizes drugs everywhere else in the world. Most drugs cost very little to make, once they are developed. One high price market (the US) repays the cost of development. Everywhere else, prices are set either by what people can afford to pay (so long as it’s above the cost to produce), or by what a government says is the most it will pay.
I did simplify a bit, but that’s the gist of it.