Why Are Prescription Drugs So Expensive in the U.S?


Did you know that someone in the United States can expect to put out around $1,200 every year just for medications? This compares to just around $830 for Canadians and $250 for Mexicans.

If you’re unlucky enough to get ill without insurance, you can find yourself struggling hard. This might mean paying even tens of thousands of dollars for certain medications!

However, having insurance doesn’t guarantee you affordable medications. In fact, many plans in the United States come with deductibles and high co-payments for prescriptions.

Are you wondering, “Why are prescription drugs so expensive here compared to other countries”? Read on to learn the main reasons why as well as what you can do to afford your medications.

Influence on Pricing by Drug Manufacturers

When wondering about drug prices in America, people often relate the pricing to the work done to make the medication. After all, a lot of research and development goes into making innovative medications.

However, the truth is that research and developments usually make up only around 10 to 20 percent of a drug manufacturer’s revenue. So, while there is a connection, it’s not as strong as the other ways that manufacturers have helped inflate drug prices.

Instead, a major factor comes down to how manufacturers get control of setting drug prices here in the United States. In other countries, the government has control and helps regulate prices so that they’re more affordable to patients.

The United States does have federal programs like Medicare and Medicaid. But private insurance is most popular and usually doesn’t do price negotiation.

Since the government doesn’t have much control over drug prices, this allows drug manufacturers to decide how much they think the medication is worth. In the end, the list price you see for a medication is what the drug manufacturer thought could capture the target market of patients.

Delays on Generic Medications

When generic drugs exist, patients have access to more affordable treatment options. These medications offer the same health benefits and safety at a small fraction of the cost. But the catch is that you won’t find any generics for popular new medications.

A drug maker will have a patent on a new medicine for a long period of time. This often lasts as much as 20 years, and only then can a company make a generic version.

However, that doesn’t mean the generic becomes available right when that patent expires.

The Food and Drug Administration often faces delays in approval that prevent affordable generics from coming to the market. The original manufacturer can also use a few strategies to hurt or stop generics from being made.

For example, the manufacturer can submit a citizen’s petition to the Food and Drug Administration. This would request that the agency not allow the generic manufacturer to make the medication.

The manufacturer can also pay off a generics manufacturer to bribe them not to make the medication. They could also try to sue the generic maker to claim patent infringement.

Lastly, the original manufacturer might make a modification to the drug. This might include a new coating, for example. Along with the new feature comes another patent that can cause delays.

Policies Supporting Drug Manufacturers

Even when an affordable version of medication is available in the United States, state and federal laws can become a roadblock. Often, these laws focus on access to generics and can cause patients to have to keep paying for expensive name-brand drugs.

For example, 26 states make any patient give personal consent to receiving a generic alternative. So, if a doctor writes you a prescription for a name-brand drug, your pharmacist would fill the expensive version even if a generic would cost a fraction of the cost. You would need to tell the pharmacist beforehand that you agree to receiving a generic.

Federal policies that have facilitated monopoly among drug manufacturers also haven’t helped drive down prices. Along with laws promoting pay-to-delay programs, the federal government has strengthened patents and made it easier for drug manufacturers to keep exclusive rights to their products.

Tips for Making Drugs More Affordable

If it seems like you’re always sick, consider taking some steps to make medications less of a strain on your wallet.

Whenever you need a medication, find out right away if you can get a generic. Ask your doctor to write the prescription for the cheaper version if possible. Otherwise, tell your pharmacist that you consent to the generic option.

Also, take some time to do some price shopping for medications. You have many tools online to try like GoodRx and WellRx. They let you get instant prices for many pharmacies near you.

Don’t forget that you can also find savings programs through the drug makers themselves. Often, you can find a coupon for new drugs that will let you pay just a small portion each refill. Find out if you qualify and show the coupon to your pharmacist to possibly save big.

Another option is to find prescription discount programs through charities. They often work with low-income individuals and those with serious medical problems. You might get a yearly grant or even free medications this way.

You can also find a reliable pharmacy in Canada to buy your medications at a discount. Buying abroad has some limitations due to laws on drug importation, but it might still be an option for you. Just check the credentials of the online pharmacy you choose.

Now You’re No Longer Wondering, “Why Are Prescriptions Drugs So Expensive?”

So, why are prescription drugs so expensive in the United States? It comes down to the level of control drug manufacturers have here as well as the many issues that keep generics off the market for longer. State and federal policies also haven’t encouraged much of an open market for medications either.

There is some potential good news about U.S. drug prices. The government is considering taking action to get generics on the market sooner and help customers save on medications overall. In the meantime, you can use the prescription savings tips to lessen the burden.

To learn more about the possibility of importing your medications and saving money, check out this blog post today.

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