Many people wonder why US prescription drug are priced so high. Well, there could be many reasons. But some researchers who have intervened and investigated to find out the reason behind the high cost of prescription medication realized it is the existence of monopoly rights for drug manufacturers protected by the government.
The researchers also published several studies so as to simplify and explain what actually has led to the increased price of drugs in the US and the possible ways to solve this crisis. These researchers found that the problem has deep and complicated roots and have also published their research findings in the journal of American Medical Association. The researchers also stated that this is a complex and nuanced problem and that there are no easy solutions to solve this.
Drug manufacturers in the US set their own prices
This is not a norm in the rest of the world as countries with national health programs have government entities that either negotiate the prices of the drugs or decide not to include those drugs whose prices seem very excessive. This kind of negotiating does not happen in the US. Medicaid has to cover all the drugs that are approved by the FDA irrespective of whether the drug is cheaper or if equally effective or more effective medicine is available.
Further private insurers rarely negotiate the drug prices. This is essential because the third-party pharmacy benefits the managers who administer the prescription drugs and also receive payments from drug companies to shift the market share in their favor.
Government-protected monopolies for certain meds are allowed
This prevents generics from coming to the market and reduce drug prices. In order to promote innovation, there is a patent system in the US which allows drug manufacturers to remain the sole manufacturer of the drugs they have been patented for 20 years or beyond. In addition, the FDA gives exclusivity for certain products which includes even those products that treat rare disease conditions.
State laws and also certain federal policies limit the abilities of generics to cut down costs
Before switching to a generic med, pharmacists in about 26 states are required to get the consent of the patient by law. The cost of the drugs grew higher as pharmacists did not get the consent of the patients and Medicaid had to pay for the costlier brand name med despite the availability of a cheaper product. Even online pharmacies demand a prescription for buying some medications.
Prices of drugs are not always justified by R&D
Though pharmaceutical companies often mention about the research and development costs when defending the high cost of prescription meds, the connection, however, is not exactly the truth. Researchers also added that most companies send only 10% to 20% of their revenue on research and development of any medicine.
Also, the biotechnology and the pharmaceutical sectors have been the best performing sectors in the US economy for years together. They also wrote that the price tags instead will wear what the market can bear. Policy makers need to find a way to tighten rules and also strengthen patent protections and exclusivity without chilling innovations.
Physicians are already aware and also are concerned about the increasing prices of the drugs in the market. There is no single policy that can address the different challenges faced by our health system associated with the growing prices of medications.