Aug 4, 2014
Prices of new drugs are way beyond our imagination and reach. For example, most of the new cancer drugs approved by the FDA have a price tag above $100,000 per year. Today, even well-insured patients usually have a 20 to 30 percent co-pay. So ordinary people cannot afford these drugs.
Certainly the manufacturing cost of these drugs cannot be the reason for these crazy prices. It costs only pennies per pill to manufacture synthetic drugs like ibuprofen. Manufacturing costs of biologic drugs like vaccines and insulin are less than $10 per dose.
“But,” argues the medical industry, “our spending on discovery and development of these drugs is very high.” This is another lie. Most of the new drugs are discovered in universities or non-profit entities like the National Institutes of Health after decades of hard work on basic science.
The pharmaceutical industry is also increasing generic drug prices. The prices of many essential generics grew by 600 percent or even 1000% in just a few years, according to the National Community Pharmacists Association.
So-called “brand drugs” are new drugs that one company monopolizes through a patent. For example, Pfizer used to be the only company manufacturing Lipitor, the cholesterol drug. So Pfizer charged sky-high prices for Lipitor, ripping off its patients. After Pfizer’s patent expired, the price of Lipitor dropped. In 2012, the generic version of Lipitor was on sale for about 50 cents per pill at Costco, while Pfizer priced it at $4.28 per pill. These pills cost pennies to manufacture, so at 50 cents, the generic Lipitor also yields huge profits to its manufacturer.
Millions of patients, mostly the elderly, had long paid pennies a pill for digoxin, used to treat a heart problem. The new version of this drug now costs $1.08 per pill.
Working people cannot avoid shockingly high drug prices by buying generics as alternatives. The average is now $50 to $100 a month for drugs. The simplest drugs have become unaffordable. Meanwhile, the gross profits of companies like Pfizer easily reach 50 percent, and their net profits are above 15 percent.