Increase in Prescription Drug Cost and Its Economic – part 5
Posted by admin in Business EssaysOutrages facts about the pharmaceutical industry
Profitable business: pharmaceutical industry claims that it’s a high risk business. But the fact is that year after year this industry is earning higher profit than any other industry.
Innovative drugs: this industry claims to be innovative to produce new and better drugs for health, but only a small fraction of its new production are truly innovative. In 2002, approved by FDA, only 17 out of 78 drugs contained new active ingredients and 7 were just the improvement of existing products.
Me-too drugs: the most profitable drugs are not better than the existing products. There is no reason to believe that the new drugs are better than the previous one.
Research done at elsewhere: most of the innovative drugs usually stem from research done at university or government labs.
Spending cost: only 14 percent of revenues earned by the drug industry is spent on R&D for so called new innovative drugs and 31 percent on marketing and administration. The industry claims that it requires $802 million each new drug to bring to the market. But it is not true, because the independent analysis says that the actual figure is a small fraction of the amount.
No drug cost regulation: The U.S. is the only advanced country that has no drug cost regulation in some way. Other countries in Europe spend only half as much for the same drugs in U.S.
Lobby: Compared to the other industry, the pharmaceutical industry has the biggest lobby in Washington, with more than elected representatives. They contribute a large amount to political campaign to get the advantages in favor for them.
Persuading people: to increase sales, this industry persuades the public in wealthy countries that they are suffering from such and such conditions that they need long-term treatment.
