Staggering Price of New Drugs

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Submitted By dtgator
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Pages 3
Why are drugs so expensive to make?

For over 20 years popular discussion has been made over the sky rocketing cost of medicine

and the fact that a major contributor to the problem are the drug manufacturing companies. The

cost of drugs are astronomically high. So high in fact that most insurance coverage of

medications requires supplemental coverage to absorb out of pocket costs for clients. Even the

social programs Medicare requires Part C or D for coverage of drugs which grew in 2013 by 2.5

percent to 271 billion dollars of Medicare/Medicaid Spending. (CMS)

In looking for answers for the steadily increasing cost of drug making, who’s annual increase

rivals or exceeds increases for the average household income, media flourishes from speculation

on the cost of promoting new drug products and points to indicators that most people see on a

regular basis on TV, in magazines and in flyers or trial prescriptions at their doctors office.

Direct Marketing

The PEW research center, in 2012 pointed out that the global drug industry spent a combined

27 billion US dollars on promotion and advertising. $24 billion went to direct marketing aimed

at educating and familiarizing physicians, using 72,000 pharmaceutical sales representatives in

the US alone. Salesmen provided samples and educational material in meeting physicians were

invited to attend. These, like most seminars come with amenities for attending.

$3 billion was spent in direct-to-customer advertising for TV and magazine articles. These are

due to a 1997, FDA guidance that enabled pharmaceutical companies to more easily advertise to

the public. Since that time, spending for TV, radio, web, journal and magazine advertisement

quadrupled. (PEW)

Research and Development

Reports vary somewhat wildly depending on sources…...

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