Prescription drug prices have become a key target of criticism by those calling for reforms to the U.S. health care system.

Upon taking office, President Biden vowed to lower these prices. His plan called on Congress to allow Medicare to negotiate drug prices with manufacturers, allow prescription drugs to be imported from Canada, impose an out-of-pocket spending cap for those on Medicare, and limit annual price increases.

Unfortunately, the plan was dropped from the latest White House spending bill after key Democrats objected to it. And according to Pfizer (PFE) CEO Albert Bourla, politicians are going at it from the wrong angle anyways.

“The issue of drug pricing is a real issue in the U.S.,” Bourla said during Yahoo Finance's All Markets Summit. “But it is not the issue that some people think and present.”

According to a January 2021 report from the RAND Corporation, “prescription drug prices in the United States are significantly higher than in other nations, with prices in the United States averaging 2.56 times those seen in 32 other nations.”

That gap increases to 3.44 times as much as other countries for brand-name drugs.

“We have a problem here,” Bourla said. “The Americans are paying for their medicines like they don’t have insurance, although they do have insurance. And this needs to change. This needs to make sure that this will not be the case moving forward. I’m sure if they have to pay less, that will be a cost and the system will have to absorb the cost. Who is paying for that cost?”

'Very, very high' out-of-pocket drug costs

Bourla's argument is that prescription drug prices only account for a fraction of overall health care spending in the U.S.

“The total cost of medicines to the health care system represents 12%,” Bourla said. “This is how much the employer, this is how much Medicare pays to us in terms of how much it pays to hospitals, physicians, everybody else. So by definition, this cannot be the big problem when we are 12%.”

Bourla also noted that prices have been going down. For example, in the first six months of 2021, Pfizer saw a 5% decrease in net pricing of medicines in the U.S., which is a trend that has been happening for a few years now.

“I’m sure the patients taking our medicines didn’t experience this -5%,” Bourla said. “They experienced 2, 3, 5, 10, 20% sometimes increases in how much they have to pay … for the cost of the medicine. The two are not connected.”

While prices may have gone down, this hasn't benefited consumers much. According to the Government Accountability Office (GAO), prescription drug spending has increased over the years.