Prescription Drug Costs Continue to Rise

Recently, CNBC released a report about a study at a major HMO with over 1,200 participants. In the study, 73% of the individuals said the cost of prescription drugs is too high because pharmaceutical companies charge too much for them.

Only 10% blamed insurance companies for the high cost of prescription drugs, even though clearly the out-of-pocket costs for an individual come from the co-pay amounts, which have steadily increased year after year.

Elderly and those on a fixed income who otherwise cannot afford prescription drugs, should seek financial assistance pharmacy Michigan and may qualify for subsidies from the pharmaceutical companies.

Consumer Market Dynamics

Healthcare costs paid by consumers for prescription drugs continue to increase. Certainly, some costs savings come from using generic versions of brand name drugs. Nevertheless, with illnesses that have new treatments, many times the only thing available is the new prescription drug. This puts the pharmaceutical companies in a monopoly position. Patent protection has to expire for generic versions of the drugs to become available.

The Cost of Clinical Trials More than Doubled in the Past Decade
Taking a balanced viewpoint, it is clear that costs for the pharmaceutical companies to bring a new drug to market have increased substantially. Tuft University did a study that noted the cost of new drug development increased from $1.2 billion to $2.6 billion during the period of 2003 to 2013.

When it costs so much to bring a new drug to market that naturally is going to make them expensive. How bad is it? As an example, CNBC reports that a new drug to treat Hepatitis C, costs $84,000 for a 12-week regimen.

Cost Recuperation or Excessive Profits?

Let’s check the numbers for the new Hepatitis C drug. The Center for Disease Control (CDC) says that 2.7 million Americans have chronic Hepatitis C, but aren’t yet sick. In 2013, the number of cases of acute Hepatitis C (those who are sick) was 29,718.

If all the acute cases were treated with this new drug, that equals about $2.5 billion, which is about what it cost to bring the drug to market. However, if only a small portion of those with chronic Hepatitis C get the acute version, profits for the maker of this drug, will be in the hundreds of billions, unless the price comes down.

Summary
This is a problem without an easy solution because the contributing factors of rising clinical trial costs and the insurance companies’ desire to increase patient co-pays, means that it is likely consumers will pay more for prescription medications.