Fact Checked

Why Are Today’s Drugs So Expensive?

Why Are Today’s Drugs So Expensive?Insurance companies blame pharmaceutical companies. Pharmaceutical companies blame insurance companies and increasing research and development costs. So why is it that a modern drug treatment can cost as much as a small house, and why is the number of Americans who pay more than $50,000 each year for their medications increasing so quickly?

 

How To Research Without Even Trying

Big pharmaceutical companies rarely spend much on R and D anymore. Instead, the business plan has shifted to acquiring smaller biotech firms who have already produced a successful product.

This is actually a good business practice on their part. By waiting for a smaller company to develop a successful drug, the big companies avoid the costs associated with a failed drug or one that fails to meet the FDA’s high standards. At the same time, they still pay for the successful drugs’ development costs in the process of buying up the company or the rights to manufacture the drug, and the researchers who put in all the effort walk away with a significant profit for their efforts and enough money to start the process all over again.

Consumers also benefit from this process because the large drug companies are the ones with the ability to manufacture and distribute a new drug fast enough to reach every pharmacy in the country in a matter of months.

 

Pricing Woes

While research costs may be shifting away from the old in-house development model, that doesn’t completely explain the high cost of new drugs. For instance, Gilead, the company that sells the new hepatitis C drug Sovaldi, recovered the $11 billion it spent for the drug rights within the first year of sales, and ever since then each $84,000 treatment plan has been almost pure profit.

Sadly, it may still take years for the federal and state governments to do anything to address this situation. Fortunately, there is something you can do right now to help relieve the burden of high-cost medication: by signing up for the USA Rx pharmacy discount card, you will gain access to discounts on prescription drugs that range from 10 to 75 percent off the cash price. These discounts are competitive with the copays of many insurance plans, and unlike insurance plans the USA Rx program will never refuse to cover a drug and never stops providing its discounts. To learn more, call our toll-free number at 888-277-3911 or send us an email at [email protected].