Prescription Drug Costs

The prescription drug industry’s role in the rising cost of healthcare is demonstrated by a difficult cycle.  The Pharmaceutical industry, one of the largest industries in the nation, thrives off of its ability to fund the research and development that finds the next miracle drug.  However, the industry’s thirst for R&D funding comes at a high price for consumers, as Americans pay more for their prescription drugs than anyone else in the world.  In order to generate a market for their drugs amongst consumers, the Pharmaceutical industry spends billions on advertising and marketing for their drugs. To pay for these campaigns, the industry tacks more onto the price of their products, this brings back the money that will again fund the process of research and development for another drug. In this system, much of the demand for drugs is generated by the pharmaceutical industry’s own marketing campaigns and as a result prescription drugs are driving up the cost of healthcare.  Thus, the relationship between the prescription drug industry and healthcare’s soaring cost is undeniable.

• In 2002, the profits of the top 10 drug companies in the Fortune 500 were more than the total profits of all the other 490 companies on the list combined. ³⁹
• The United States is one of two countries in the world that allows pharmaceutical companies to advertise.⁴⁰
• During the beginning of 2008, the average wholesale price of 17 brand-name drugs doubled. It is also projected that the prices on 64 other drugs are expected to more than double by the end of the year. ⁴¹
  Half of the profits in the drug industry worldwide are paid for by Americans. ⁴²