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Why do prescription drugs cost so much?

Have you ever wondered how your prescription drugs can cost so much? This is becoming one of those age-old questions that has lots of possible answers – and is highly debated. It seems to be illogical that such tiny little pills can be so expensive. In fact, though, it is very expensive to create the medicines we all tend to take for granted.

First of all, we should understand what it takes to get a drug into the hands of consumers. To be approved by the FDA for use by patients, drugs have a long and expensive journey. For every 100 possible drugs, only one will ever be approved, and it takes about 10 years from discovery of the drug to the time it becomes available for sale. This process of research and development costs anywhere between $250 Million and $900 Million (and yes, that’s for ONE drug) with the average somewhere in the middle. One might wonder why the process is so long and expensive – even arguing that reducing the length of this approval process might reduce costs. Unfortunately, reducing costs here could mean that less safe drugs could reach the market and cause other, more costly issues.

Because such a small number of possible drugs make it to market to be sold, prescription drug prices must cover the costs of doing the research on the drugs that do not get approved. Without recouping their costs somewhere along the line, researching and developing new drugs would become a burden to pharmaceutical companies and new medicines would never come to be.

One way that pharmaceutical companies attempt to cover the costs of research and development and earn a profit is to advertise their products. Surely everyone can name at least a few drug ads that they have seen countless times. This phenomenon, called Direct to Consumer or DTC Advertising, is fairly new. Before the end of the 20th century, drugs could only be marketed to physicians who prescribed them. With the legalization of DTC advertising, pharmaceutical companies have spent increasing amounts on marketing – from $1.8 billion in 1999 to more than $4 billion in 2005 with no signs of slowing anytime in the future. According to the pharmaceutical industry, this spending does not impact the cost of their drugs.

Another thing to keep in mind when discussing the sometimes high cost of prescription drugs is the benefit they provide to an individual. Obviously, it is less expensive take a blood pressure or cholesterol lowering medication than to spend weeks in the hospital after suffering a heart attack or stroke. These medicines, although they feel spendy when we pick them up, are actually saving us thousands of dollars by keeping us out of the hospital and helping to curb the number of doctor visits we require.

All in all, it is healthy to debate the cost of our drugs, as a good discussion will keep making changes in the positive direction – but we need to keep in mind that we are receiving a great benefit from the medications we take – improved health.

http://www.phrma.org/files/Cost_of_Prescription_Drugs.pdf
http://www.supplementquality.com/news/skyrocketing_drug_costs.html

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