Anyone who has ever been prescribed a prescription drug, especially if they did not have insurance when they were prescribed that drug, can tell you that brand-name prescription drugs usually cost an arm and a leg. Why is this? And why are generic drugs so much less expensive?
Consumer Affairs recently reported that patients spent over $450 billion on prescription drugs in 2015. The price of prescription medications is one of the top issues plaguing American consumers. Why should we have to go into debt when we need the medication that will make us better? Consumer Affairs also noted that the price of medication has risen each year at a rate that far surpasses the rate of inflation.
Lixian Zhong, PhD, an assistant professor of pharmaceutical sciences at the Texas A&M, told Consumer Affairs that not only due brand-name drugs start out expensive, but they tend to increase in price on an annual basis. This is because of the high costs that are involved in developing the drug, in addition to the any additional factors that affect the industry as a whole that trickle down to the price of each individual drug, such as a limited time period in which companies can see the most amount of profit from their drug.
The moment a drug hits the market, its manufacturer is issued a patent that gives that manufacturer exclusive rights to that drug for "x" amount of years. Once that patent expires, that's when the drug becomes "generic," which means that other manufacturers can then use that recipe to make similar, less costly drugs.
Another issue affecting the price of prescription drugs is the size of the market for that particular drug. The more specialized the drug, the more expensive it tends to be. Zhong noted that some of the most expensive drugs on the market are those that are used to treat "orphan diseases," which are diseases that affect groups of less than 200,000 people. Orphan diseases can be well-known diseases, like Lou Gehrig's disease and Tourette's syndrome, or less common afflictions, like gigantism.
Drugs that treat more complicated conditions can also be incredibly pricey, especially – of course – if they are very effective at treating the condition. Zhong noted how there is one drug in particular that has a higher cure rate for hepatitis C than other similar drugs on the market (along with fewer side effects) so, of course, that drug is usually incredibly expensive. Zhong stated that newer drugs that have been developed to treat conditions like cancer and multiple sclerosis can easily cost over $10,000 annually.
However, patients do not have to financially collapse under the weight of the prices of the drugs that they need in order to live happier and more fulfilling lives. Zhong offers a few tips for patients that can help make their medications more affordable, including: