On average, Americans pay $1,300 per year on prescribed pharmaceuticals. This is higher than anywhere else in the world, according to 46Brooklyn, a nonprofit organization dedicated to improving access to U.S. drug pricing data. Even more startling, the price of a new prescription drug is an average of $180,000 per year. So what is the reason for these extreme prices?
Many would assume it is the corporate greed of big pharmaceutical companies. However, Dr. Bruce Prins, professor of biology, explained that this might be an oversimplification of a complicated problem.
“Medications are created in a company whose reason for being a company is making money,” Prins said.
“It feels a little shady, but that’s what drives innovation. These scientists spend a lot of time in school. They want to get paid and pay their debts back, buy a house (and) have a car and a
family. So there’s profit to it, no doubt.”
Scientists spend at least three years designing a drug before it can go on the market. The drug must pass several trials to prove it is both safe and effective. During this research and development (R&D) phase, companies pour millions into manufacturing their drug.
Prins explained that after the development has been completed, these companies receive a seven-year patent. During this time, they must make back all the money they spent and eventually turn a profit. Their ability to do so depends heavily on how many people need the treatment.
“If we’re dealing with a disease that we now can treat and there’s a lot of people who have it, we can cut how much it’s going to cost per person,” Prins said. “But if it’s not very common, then the price goes way up because it’s still going to cost a lot for the R&D. You don’t sell as much, so what you do sell has to pay back whatever it costs to create it.”
These are important factors to consider when examining the price of pharmaceuticals. However, this does not fully explain why costs are higher in America compared to other nations.
One in four Americans struggle to afford their prescription medications, and 30% have admitted to skipping doses, cutting pills or not renewing their prescription because of price, according to an executive order signed by President Joe Biden.
Due to the lack of competition, many pharmaceutical companies have been able to increase their prices to maximize profits. However, their prices have become too
expensive for many Americans.
“I can understand why pharmaceutical companies want the money, but it’s frustrating,” said Rebecca Gonzalez, sophomore biology major. “Here are all these drugs that can help people, and they can’t afford to pay for them.”
The prices of pharmaceuticals has become a growing concern with more and more Americans unable to afford them. Finally it seems action, albeit limited, is being taken to combat these rising costs.
“It’s hard to know where the balance is,” Prins said. “There is always that profit versus the good of society. Theoretically, the government is working on the good of society, and the companies are working on profits.”
Biden’s executive order signed on Oct. 14 is a step toward lowering pharmaceutical prices by capping out-of-pocket costs. This includes a cap of $35 per month on insulin, a notoriously expensive drug in America compared to other nations.
It is only natural to want lower pharmaceutical prices. However, it is essential to consider the implications that would hold.
Taking prescription medication is not like driving a car, Prins explained. You cannot just stop taking them when they get expensive. However, this profit motivates biotech companies to continue researching and producing more medications.