Price Gouging Research Paper

There are multiple health concerns worldwide and more and more drugs are needed every day. Many drugs however, are extremely expensive to develop, test, and produce. According to the Tufts Center for the Study of Drug Development (2002), it costs up to $802 million to bring a new drug to the market. In 2002, pharmaceutical companies spent $34 billion in research and development (Center-Watch, 2003). In addition to the costs, the overall time from the discovery to approve and market the drug can take up to 15 years.

The prices of prescription drugs in the United States are by far the highest in the world. [1] On average, Europeans pay 40% less than Americans for the same medications. [2] Consumers have been resorting to several ways, sometimes putting themselves in harm’s way, to alleviate the burden of high prescription drug costs. Some buy their medications online or cross the borders to neighboring countries so they would be able to afford buying their needed medications. Others have resorted to the illegal act of selling their unused medications in online forums just to recover part of their expenses. Many factors contribute to the increased drug prices in the United States including research and

One added reason could be the current high number of mergers in the industry. Which in the long run leads to less competition, driving the innovation down and the prices up. In the United States, there are no regulatory efforts to stop the companies for charging so much. They are one of the only nations that believes in a free market for drug pricing. They are only one of two countries that allow direct-to-consumer advertising of pharmaceuticals. As of today the United States does not import drugs from

The high prices set by pharmaceutical companies for drugs allows the companies to continue researching, developing, and producing new drugs. As new diseases are discovered, new medications must be discovered in order to treat them.

With soaring medication prices, many drug manufactures have the aspiration to increase profits, which have the effect of rising drugs cost and concerning for Americans. Fortunately, both Democrats and Republican have illustrated interest in passing Prescription Drug Affordability Act of 2015. Captivatingly, the act will allow Medicare to consult manufacturers and set affordable prices. Many have also requested to allow of purchasing medication from Canada which currently has lower drug cost. Reports often appear in the popular press about American consumers who go to Canada or Mexico to buy their prescription drugs at a fraction of what they would pay in U.S. pharmacies, even though doing so is illegal (1). By contrast, the United States leads

A reason for that is that the introduction of biosimilars is expected to reduce drug costs, although to a lesser degree than seen with small-molecule generic drugs. This difference can be explained due to the importance of clinical trials in the case of biosimilars, as the process is fully part of the final drug : Generic medicines need to

This results in people not being able to receive the necessary healthcare, especially since majority of tests done a person are not needed. Many of the times when doctors order tests to be run, they are aware that the test is unnecessary but they need to be sure to cover themselves in the unfortunate case of something happening. Other people are also pressuring doctors in running tests to increase their RVU, unit of billable activity per hour. If a doctors RVU is not high enough they are pressured into running more tests and seeing more patients, rather than actually helping the patient. The drug industry only amounts to approximately 12 percent of the total cost of healthcare in America. The total sales of the top five drug companies in 2005 were 222 billion dollars. Drug companies state that the reason their products are so expensive is so they can fund the research and development of the drugs; however, only 32 billion dollars were spent on research and development, 71 billion dollars on marketing, and 39 billion dollars in profit. The facts listed above are all contributing factors as to why healthcare is so expensive, but the most significant reason healthcare is expensive is due to the cost of the paperwork.

The rise in costs of prescription medicines affects all sectors of the health care industry, including private insurers, public programs, and patients. Spending on prescription drugs continues to be an important health care concern, particularly in light of rising pharmaceutical costs, the aging population, and increased use of costly specialty drugs. In recent history, increases in prescription drug costs have outpaced other categories of health care spending, rising rapidly throughout the latter half of the 1990s and early 2000s. (Kaiseredu.org, 2012).

Most of this increase reflects the cost of research, and the time it takes to develop a medication, and have it approved by the Food and Drug Administration. A medication takes years to advance from idea, to theory, to research and testing, and finally to approval. All of this time costs money.

Prescription drug prices rose three times faster than inflation in the decade between 1981 and 1991, making the pharmaceutical industry the nation's most profitable business. Prescription drugs even exceeded the rapidly rising inflation rate for all other medical services. They now represent at least 10% of all the medical

The government can only control so much unfortunately this is a touchy subject amongst politicians. There are two ways that the government is currently regulating the prescription drug market, 1. Price controls, usually in the form of required discounts off the average price paid by other purchasers.2. Negotiated pricing, in which the government wields its market power to bargain for favorable rates from pharmaceutical suppliers” (Drug Price Control: How Some Government Programs Do It, 2016 para 2). There are a couple different programs that also benefit consumers if they are eligible such as Medicaid, The Veterans Health Administration (VA) and the Department of Defense (DOD),

America is making profit out of prescription drugs, being the wealthiest country, people in America should not live in fear that they would go bankrupt or die if they cannot afford the drugs. Drug companies need to stop being greedy, selfish, and uncaring. These drugs are expensive, however, many Americans cannot afford these prices. The increasing cost of prescription drugs in the United States has become a source of concern for million of patients. They are taking advantage of innocent elders, consumers are unable to purchase prescription drugs, and the pharmaceutical industry is contributing to the high price of prescription drugs. This issue is important to me because I am planning to go into the pharmaceutical industry. I want people to

The industry is making lower quality material even though they have the money to spend, corruption is somewhat common among the industries. ”We're not adding any patient to the population of those that could benefit from the drug. As far as the patients are concerned, it is a complete waste”(Drugs For Rare Diseases Have Become Uncommonly Rich Monopolies)Drug pricing can be manipulated through law and availability, naturally a drug for a rarer disease will be more expensive, the companies use this to clinch more financing. The general majority is not being taken care of as much as the minority population with rare diseases. Drugs developed for rarer diseases are called “Orphan Drugs”. The research being payed for by taxpayers and the federal government is being used for developing more orphan drugs than drugs for more common diseases. This wastes some time and money, as orphan drugs typically take a lot longer to develop than other drugs. Although orphan drugs

The cost of new medical drugs seems to be accepted by many people who use them. These pharmaceutical companies increase their profits more and more each year because many people assume that it does cost a lot of money for research and development. Where in reality, they are only spending about 15% of their profit margins on research and development alone. A huge percentage of these drugs are actually tested in other countries where people are more willing to do trials with these drugs because they cannot afford them. Not only are there more people who are more willing to try them, but also there is less regulation and oversight when it comes to testing. Conducting these clinical trials overseas not only saves

Another important factor is the inefficient patent system that gives drug companies monopoly power, enabling them to charge such obscene prices for years. It is undisputed that pharmaceutical companies are the innovative engine for the discovery of new drugs. In 2012, according to Pharmaceutical Research and Manufacturers of America (“PhRMA”), pharmaceutical companies spent at least $48.5 billion on research and development. The new drug R&D process is costly, with average investment for each new drug approved standing at $1.2 billion due to the cost of failures.It was estimated that up to 10,000 compounds may be needed to produce one successful Food and Drug Administration (FDA)-approved drug. On the other hand, if we consider the profit then the