Why Do Prescription Drugs Cost SO Much?

In 2020 the expected global expenditure on prescription drugs was somewhere around 1.3 TRILLION dollars, with around $350 BILLION of that spending being done in the United States. The US seems to have a particular issue in this area, with citizens paying much more than their counterparts in similar countries. But why do prescription drugs cost so much? And why do some cost so much more than others?

Special thanks to the NIHCM for supporting this special series on the costs of prescription drugs.

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Credits:
Aaron Carroll -- Writer
Tiffany Doherty -- Writer and Script Editor
John Green -- Executive Producer
Stan Muller -- Director, Producer
Mark Olsen – Creative Director, Producer

[AnonymousFreakYT]

One reform I'd like to see is a return to 7-year patents with no extensions.

Because I am a realist and understand that medicines/medical products take longer to bring to market due to approval processes, I would accept completely pausing the patent calendar from the day they file for approval to the day approval is granted. Takes four years to go through approval trials? Those four years don't count.That way _safety_ doesn't get in the way of profits, so they're less likely to shortcut safety.

[SinHurr]

I'm going to guess it rhymes with "for profit healthcare and price gouging for inelastic demand goods."

[BarryPiper]

I couldn't believe it when I moved overseas and saw the bill for my three medications (for blood pressure, diuretic & cholesterol) cost me about $12 for a three month supply.

[biophile]

R&D is publicly funded with grants, and tax deductible. We subsidize them twice.

[BrianMartensOfficial]

We can't talk about policy reform without talking about the incentive structure that led us here. How can we achieve policy reform when there is so much money behind the status quo? Any attempt at policy reform is going to be squashed by the billions of lobbying dollars going to politicians who favor the status quo and to targeted advertising to sway people into voting against their own interests. I don't see policy reform happening any time soon, especially with respect to secondary patent abuse. If anything, the USPTO will just get less funding.

[mrchiefbs]

I was in Sweden for a month recently and it's like a paradise... they say they have problems too sure but I never once felt threatened or unsure of someone in public. Their healthcare is awesome. They also focus heavily on exercise and healthy meals.

[MafistoOU]

To paraphrase Goodfellas~ "Because FU, pay me!"

[Croz]

Part of the reason drugs are cheaper in other countries is the immense bargaining power big drug purchasers have when tied to state healthcare systems. In the UK there is pretty much one buyer for prescription medicines and they will negotiate hard with drug companies, and are quite prepared to reject a drug if it's considered poor value for money, which can be controversial (though there are exceptions for orphan drugs). But that's the trade-off for cheaper medicines, you might not always get the latest and greatest if it's only a marginal improvement on existing treatments.

[sshuggi]

"Top answers on the board. Name the reason prescription drugs cost so much."
BRRR
"Uh, Greed."
DING
"Greed 100"

[connorkendrick]

We didn’t even mention PBMs…. That’s a huge relatively new cost, and a large reason prices are increasing

[johnransom]

Shocked Canadian here. Insulin was invented here and was given to the world free from patents. Banting and Best, the creators, wanted as many people to get it as possible so shared the way to make it free of charge. How does it cost so much in the USA if it’s not patented? Greed and corruption are the only answer.

[sirwillsirwill]

How does this channel not have wayy more views ?

[LZKS]

A wise man once said, "Expecting morality out of corporation is like expecting a racoon to not steal your pizza. It's not the racoon's fault, it's your fault for letting them do it." Abolish all lobbying.

[mrchiefbs]

They don't have to be! Because the USA isn't as free as you think it is!! Congress is actively working to keep this system because they're profiting off of it!

[ArgzeroYT]

No. Patents should not be allowed to grant exclusivity. Instead they should allow for a mandatory fee on profit on goods sold / related services offered, capped up to a maximum percentage. This enables innovation and also grants value to the inventor.

[SlimThrull]

Stop giving tax dollars to companies who raise prices faster than inflation.

[garyellenor]

I feel the problem with patents is they start when a compound is identified instead of when approved by FDA for marketing. If patent term begins at marketing at a shorter term could be used to allow companies to recoup their expenses. Additional patents should be eliminated.
Also manufactures should be required to sell the drugs at the same price they charge in foreign countries. Further more do away with advertising like they have done in other countries ie Australia, and do away with lobbying.

[rby]

And for pharmaceutical companies, and anyone else, governmental fines need to be 1.N (with N scaling to the severity of the violation and the previous frequency of violations from said offender) times the amount of money that they would have made committing the violation. When the FTC fines AT&T for illegally selling our personal information against the law and their own policy, and the fine is 0.1% of their yearly profit, it's just a cost of doing business.

And there a long history of all sorts of white collar crime like this, so estimating the financial benefits of those violations should be pretty easy...

[DtWolfwood]

Dont they also just spend the most of their money on extending their patents instead of actually coming up with new drugs, i.e. coming with new ways to administer the drugs.

[kuil]

Because congress gets government healthcare and is lobbied to keep the healthcare system as profitable as inhumanely as possible.