Four Main Reasons Prescription Drug Prices Are So High
Drug prices continue to rise every year in the United States. With prices so high, many people are unable to afford the life-saving prescriptions they need. Between 2008 and 2014, name brand prescriptions jumped a whopping 128% on average. With such shocking price increases, it leads many consumers to wonder why prescription drugs are so expensive in the United States. Here are the four main reasons for these ever-increasing prices.
1. Prescription Companies Determine Pricing
Unlike in other countries, there is no price fixing in the United States. So prescription drug prices are determined by the manufacturers themselves. Instead companies set prices depending on market fluctuations, the costs of competing drugs, and efficacy of the drug. These prices can quickly escalate beyond what is affordable for the average consumer and there are many cases where prescription drug companies charge more than the drug’s manufacturing value.
2. Research, Development, And Manufacturing Costs Drive Prices
Research and development can be very costly for drug companies. There are some instances where a prescription drug has taken a decade to development and get approved. While these development costs can rack up into the billions. Couple that with the costs of manufacturing which has very stringent quality controls and overhead and materials costs. All of these costs are then passed on to the consumer.
3. There Is Limited Competition
There are two main things limiting competition in the United States market. The first is that patents last a very long time. United States prescription drug patents last 20 years, so for at least the first decade or so the market is dominated by one product. Competition is further reduced with a lack of generics, length of R&D, and import regulations that limit the prescription drugs available on the market.
4. FDA Approval Takes A Long Time
FDA approval of new prescriptions is very strict, so it can take a long time to get full approval to take a product to market. This lengthy approval time drives costs. In the case of cost-saving generics, the approval process takes even longer. In most cases, it is an average of 3-4 years to get a prescription drug that isn’t protected by a patent approved by the FDA. So for newer drugs, there are not always more affordable options available.
With so many factors driving the costs of prescription drugs, it is no wonder that the average person is having difficulties paying for their prescriptions. Fortunately, there are some options to consider. One of the best ways to keep your prescription costs low is with a USA Rx pharmacy discount card. Discount cards negotiate with pharmacies and drug companies to get better prices for cardholders. So until so major legislative changes, prescription pill prices are not decreasing. Until then, you can help mitigate those costs with a USA Rx pharmacy discount card.