Reasons for High U.S. Drug Prices (Hint: It's Not Development Costs)

By Joe Elia

Edited by David G. Fairchild, MD, MPH

Drug companies' protestations that their high prices stem from the costs of development don't hold up under scrutiny, a JAMA analysis asserts.

The analysts reviewed clinical, regulatory, and legislative documents from the past decade to investigate factors contributing to U.S. drug costs — the world's highest.

They assign blame to two major factors: protection from competition by manufacturers of generic versions and prohibitions against negotiating lower prices. Also at fault are government-granted monopoly rights for new drugs and legal (and chemical) maneuverings to extend those monopolies.

The authors find "little evidence of an association between [R&D] costs and drug prices." Here in the U.S., they say, pricing is based on "what the market will bear."

(In related news, the New York Times noted the six-fold increase over the past decade in the price of Mylan's EpiPen, the epinephrine self-injection device for life-threatening allergic reactions.)