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Provider Perspectives
Pharmacist on Cost of Rx Drugs
Anyone who has ever had to pay for a prescription out of pocket can tell you that the cost of drugs in America, particularly “brand name” drugs, is through the roof. But why are drugs so expensive? And do we have any alternatives to the current situation?
Mike, a Rockford pharmacist, explains that the high cost of prescription drugs can be attributed to the expense of research and development and a lack of government involvement at crucial stages of the process.
When a drug company develops a drug and files for a patent, they have the rights to that drug for 20 years. That may seem like a long time, but the first 8-10 years are spent testing the drug, leaving only 10-12 years for the company to make a profit on it. Once the patent runs out, it’s open season and the generic manufacturers can sell the drug as well. These companies can sell the drugs for next to nothing, because most drugs are actually quite inexpensive to make — it's the research that must be paid for. And research is not cheap. Over 99% of compounds tested never make it to market, so the company must make up the cost of testing all of those unsuccessful drugs with the ones that do make it to market.
This is all well and good, but without any market regulations in place, pharmaceutical companies are allowed to charge whatever price they see fit- and are making what Mike calls, “obscene” profits in the process. This is not the case in other countries, where the government negotiates prices with the drug companies. Since the price of prescription drugs is lower in other industrialized nations than in the United States, many consumers and politicians have advocated importing drugs from other countries as a solution to skyrocketing costs in America. According to Mike, it would make more sense for the United States government to follow suit and begin regulating prices at home as well. Mike’s reasoning is that importing the drugs just gives them a chance to be stored improperly or tampered with, making them less safe.
Detractors say that Mike’s approach would restrict research and development, and interfere with companies’ ability to produce drugs. However, Mike is willing to bet that with profits as high as they are now, the companies would be able to absorb this loss and keep producing. And even if it did have an impact on the industry, would that really be so bad? “It's great and all that we're a capitalist society, says Mike, “but I don't really think healthcare should be about making profits — drug companies included.” As Mike points out, the government funds plenty of basic science research. The government could also fund drug research thus ensuring the continued development and production of prescription drugs.
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