Doctors push drugs, they get a cut every time they prescribe a medication. That is why they are so fond of prescribing pill rather than opting for “a natural solution against the root cause”. This extreme yet sustained opinion flourishes on social media. People who believe in such ideas do not understand how pills are paid for in their countries.
Below is the explanation how it works in the countries with universal healthcare (virtually all countries), and then in those few countries with no universal healthcare. The most notable example of the latter is the United States.
Countries with universal healthcare
In countries with universal healthcare, governments or health agencies pay for most medical drugs. They do not pay the full price set by drug companies. Instead, they negotiate prices based on value, cost, and budget.
Here’s how it works:
- Price Negotiation – The government or a health insurer discusses the price with the drug manufacturer. They agree on a fair price.
- Reimbursement List – If a drug is approved, it goes on a list of medicines the system will pay for.
- Patient Cost – Patients may get the drug for free or pay a small part, depending on the country.
- Manufacturer Payment – The government or insurer reimburses the manufacturer based on agreed prices and how much of the drug is used.
- Cost Control – Some countries set spending limits. If drug costs go over, manufacturers may have to refund part of the money.
Universal healthcare: why do doctors not push drugs
In most countries with universal healthcare, doctors do not get paid for prescribing specific drugs. Their salary comes from the healthcare system, not from drug sales.
The only allowed and strictly controlled situations when a doctor may receive any remuneration directly or indirectly include:
- Fee-for-service systems – In some countries, doctors are paid per consultation or treatment, but not directly for prescriptions.
- Dispensing doctors – In rural areas or in special cases such as a distribution of Covid vaccines (dedicated and time limited government campaigns), doctors may both prescribe and sell drugs, earning a small profit.
- Industry influence – Some drug companies offer perks like free samples, research funding, or conference trips, but strict rules limit this in most countries.
To prevent conflicts of interest, most governments regulate how drug companies interact with doctors.
No Universal Healthcare: the Unites States
In the USA, drug reimbursement works differently because there is no universal healthcare. Instead, multiple systems pay for medications:
How It Works
- Private Insurance – Most people get drug coverage through private health insurance, which negotiates prices with drug companies. Patients pay part of the cost (co-pays or deductibles).
- Medicare & Medicaid –
- Medicare (for seniors/disabled): Covers drugs through Medicare Part D (private plans subsidized by the government). Prices are negotiated, but patients still pay some costs.
- Medicaid (for low-income people): The government negotiates lower prices and pays most of the cost.
- Drug Rebates – Insurance companies, Medicare, and Medicaid get rebates from drug manufacturers, lowering costs.
- Cash Pay – People without insurance pay the full price, which can be very high. Some use discount programs or coupons from manufacturers.
- 340B Program – Some hospitals and clinics get drugs at big discounts to serve low-income patients.
Do US Doctors Get Paid for Prescribing?
- No, doctors do not get paid for writing prescriptions.
- But some doctors who administer drugs in-office (like chemotherapy) get reimbursement through Medicare Part B or private insurance.
- Pharmacies, not doctors, make money from selling drugs.
The US system is complex because many groups (insurance companies, government programs, and manufacturers) are involved in pricing and payment.
Example: Who Gets Your Money When You Buy Losartan?
In Europe (Universal Healthcare)
Most European countries have price-controlled drug markets, so governments negotiate lower prices. Here’s an estimated breakdown if you buy Losartan 100mg at a pharmacy:
- Government/Health Insurer (60-90%) – Pays most of the cost as reimbursement.
- Pharmacy (5-20%) – Keeps a small margin for dispensing.
- Drug Manufacturer (10-30%) – Gets the negotiated price for the drug.
- Wholesaler/Distributor (5-10%) – Handles storage and delivery.
Your out-of-pocket cost depends on the country’s co-payment rules. In some places, it’s free; in others, you pay a small fixed amount.
In the USA (Private Market, No Price Control)
If you buy Losartan 100mg in a large package from a pharmacy, here’s where your money goes:
- Pharmacy Benefit Manager (PBM) (30-50%) – The middleman that negotiates drug prices and keeps rebates.
- Pharmacy (10-30%) – Profit margin depends on whether it’s a chain or independent pharmacy.
- Drug Manufacturer (20-40%) – Gets the wholesale price after rebates.
- Wholesaler/Distributor (5-10%) – Moves the drug from manufacturer to pharmacy.
When you pay cash, the pharmacy sets its own price, which can be much higher than the actual cost. If you use insurance, the PBM plays a big role in the final price.
In short, Europe pays less overall, and more of the money goes directly to manufacturers and pharmacies. In the USA, PBMs and insurance companies take a big cut, making prices higher for patients without good coverage.
