46 b) The Myths about Drugs Costing So Much Money to Make

The first thing pharmaceutical companies say when they answer questions about the retail cost of drugs is that prescription drugs cost a lot of money to get approved by the FDA. That stems from the millions of dollars that get spent developing the drugs.

On average, the cost of prescription drugs in the U.S. is at least double what people in other countries pay for the same exact product and in some cases, it can be as much as 10 times more. Why is the price so staggering for a drug that is the same formula and cheaper anywhere else in the world?

I do worry that people’s fear and anxiety are being taken advantage of. And yes, it costs money to develop these drugs, but I do think the price is too high,” Saltz told 60 Minutes.

Pharmaceutical companies are fond of saying Americans take the lion’s share of the R&D costs for the rest of the world – calling other countries “foreign free riders.” So, drug companies are forced to charge Americans more to recover what they don’t get from other countries.

In fact, the more disturbing truth is that companies charge what they want in the U.S., and it’s a profiteering paradise for them.

PhRMA, the industry lobbying group, released a 2013 report showing that drug companies spent an estimated $48.5 billion on R&D in 2012. The most current figures they have (from the early 2000’s) show the cost of developing one drug is about $1.2 billion.

Stay tuned next week for more on this,