Why Are Prescription Drugs in the US So Expensive?

Anyone who works in medicine is probably aware that in the United States, prescription drugs can be considerably more expensive than they are elsewhere in the world. A good example is Humira (adilimumab), a name brand prescription anti-inflammatory drug used to treat arthritis, psoriasis, ankylosing spondylitis, and several other health conditions. It works by binding to tumor necrosis factor alpha, inhibiting its ability to induce inflammatory responses in patients with autoimmune disorders.

Humira is quite effective for autoimmune disorders, and in 2015, the total amount spent worldwide by patients on this medication exceeded $15 billion. But in the United States, Humira is unusually expensive compared to its price in other regions of the world. In the United Kingdom, a Humira prescription runs around $1,362. In Switzerland, it’s around $822. But in the US, it costs $2,669.

Why is it that in the United States, prescription drugs are so comparatively expensive? After all, it’s the exact same medication, from the exact same pharmaceutical company.

The Role of Regulation in US Drug Prices

The reason lies in the regulatory system around the pharmaceutical industry in the United States. When drugs come onto the market, there is no negotiation regarding its price. In other nations, it’s common for a government agency to meet with the pharmaceutical company to negotiate a fair price, as well as to determine whether they’re effective enough to allow onto the market in the first place.

In the United States, pharmaceutical manufacturers are free to set their own price for prescription medications. And, as long as the drug has been proven safe and effective for use in humans, it’s allowed onto the market. This leads to higher co-pays for patients and the ongoing problem of people going to severe medical debt in order to get the life-saving medications they need.

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