5 Reasons Why Prescription Drug Prices Are So High in the U.S.

Government protected "Monopoly" rights for drug manufacturers, is the main reason for higher prices of drugs in the United States. Many types of research have been conducted from January 2005 to July 2016 just to find out how to solve America’s drug price crisis and the cause behind it. After finding that the problem is deep down in the roots, they have published it in JAMA- The Journal of the American Medical Association. Here are few findings in the JAMA review:

In US drug manufacturers set their own prices which are applied anywhere else in the world.

Countries having national health programs are associated with government entities that either decide not to cover expensive drugs or negotiate drug prices. No similar negotiation took place in the US. In 2003, when a republican majority Congress launched the Medical Drug benefit, they barred down the program that covers 40 million Americans that negotiate drug prices. Medicaid, covers all the Food and Drug Administration approved drugs. As the managers who administer prescription drugs gets benefited by third party pharmacy, the private insurers rarely negotiate with them.

Government protected monopolies are allowed for certain drugs to prevent generics to enter in the market.

While promoting innovation, the US allows drug manufacturers to be sole manufacturer of the drug they have patented for 20 years or more. The drug manufacturers also get exclusivity from the Food and Drug Administration for the drugs which treats people having rare diseases like buy Xenical online, buy tadalafil online. The study says that, to maintain their monopoly the drug companies sometimes deploy questionable strategies. This includes tweaking slightly the nontherapeutic parts of drugs, such as to game the patent system, pill coatings and paying large amount for "pay for delay" settlements to generic manufacturers when they got sued for these patents. This creates a serious problem as drug prices reduced to 55% of their original brand if there are two generics in the market and to 33% if there are five generics.

The FDA takes long time to approve generic drugs.

The study says, that the application backlogs at the Food and Drug Administration leads to delay of three to four years due to which generic manufactures wins the approval to make drugs not being protected by patents, causing decline in drugs cost as compared to its original brand.

Sometimes well intentioned federal policies and state laws limit generics abilities to keep cost down.

In 26 states, the pharmacists by law are required to get patient consent before switching to a generic drug. This according to a report just for one drug: a statin called simvastatin whose brand name is Zocor, costs Medicaid $19.8 million in 2006. As the pharmacist doesn’t get the patient consent causes a much higher cost and due to which even though a cheaper product was available, Medicaid had to pay for the costlier brand name.

Research & Development doesn’t really justify the price of drugs

Drug manufacturers when defending high prescription prices often cite research and development costs but it isn’t 100% true. Many a times, the scientific research of a new drug is mostly funded via federal grants by the National Institutes of Health or else by a venture capital. The companies only spend 10 percent to 20 percent on research and development of their revenue. The pharmaceutical sectors and biotechnology were among the best performing sectors for years in the United States economy. They say the prices of drugs are based on the amount the market can bear.

As a conclusion America’s high prices of drug problem isn’t easy to solve. The power of pharmaceutical sector and congressional gridlock are unlikely to make Medicare to negotiate Part D prices. Which is why dropping that idea aside policymakers much find a solution to strengthen and tighten the rules for the protection of patients and exclusivity without chilling innovations. Those who are not involved in the study said that the facts which got published in JAMA are true as the author got the opportunity to directly talk to the doctors.

"I think the most significant thing about this is not necessarily what he’s saying but who he’s saying it to," said Kenneth Kaitin, who directs the Tufts Centre for the Study of Drug Development. "In part, the concern over rising drug prices is something that physicians have been more aware of lately…They’ve still been for the most part on the side-lines of these issues."

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