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Why are Drug Prices Increasing
American Government (POLS 1101)
Columbus State University
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Political Science 1101 Nathan Combes 14 March 2018 Why are American Drug Prices Increasing? Almost everybody knows that America’s drug prices are increasing at a steady rate and they are furious about it, but do they know why it’s happening? It seems that recently there have been stories about insurance companies putting obstacles between consumers and less risky medications with lower prices. Between 2006 and 2015, pharmaceutical and biotechnology sales revenue increased from $534 billion to $775 billion. "Drug companies raise prices far exceeding inflation because they can," said Scott Knoer, chief pharmacy officer at the Cleveland Clinic. "In the absence of regulation and without consumer awareness—since consumers don't generally see the price due to insurance—the sky is the limit." So who is to blame for all this? The U. has pretty much allowed drug companies to just set their own prices. The U. Government Accountability Office (GAO) decided to find out who is behind the fastest growing expenses in healthcare. They found that much of the rise in drug spending was fueled by the use of expensive brand-name drugs, although some pharmaceutical companies have increased generic drug prices as well. Though, the pharmaceutical industry’s main defense of rising medicine prices are the high costs associated with drug development. According to the Journal of Health Economics, drug companies spend over 10 years and $2 billion to bring a drug to the market. The Food Drug Administration (FDA) has been trying to approve more low-cost generic-drugs in order to lower pharmaceutical prices. The FDA also claims they are trying to fix the problem of branded drug manufacturers blocking generic drug companies. “People are concerned about drug prices; more are being forced to make trade-offs between paying for their
drugs and for food or rent,” says AARP’s Purvis. We need to stop letting the large drug competitors take charge get in the way of lower drug costs.
Why are Drug Prices Increasing
Course: American Government (POLS 1101)
University: Columbus State University
