Prescription drugs have had a significant impact on human society. From treating temporary conditions and controlling chronic conditions, prescription drugs have been critical to preserving long-term health and quality of life for millions of people for well over a century.
However, prescription drugs tend to be quite expensive in the United States when compared to other countries. A 2023 RAND Corporation study found that brand-name prescription drug prices in the U.S. were 3.44 times higher compared to 32 similar nations.
According to a Kaiser Family Foundation Health Tracking Poll, 8 in 10 U.S. adults believe prescription medication prices in the country are “unreasonable.” Past research has also found that 3 in 10 individuals taking four or more prescription drugs struggle to afford their medications. Finally, overall spending on prescription drugs in the U.S. has increased by a whopping 76% from 2000 to 2017, and these costs are expected to rise even further this year.
Profit-driven drug makers are one of the main reasons for the surging medical costs in the country. Pharmaceutical companies say new drug development is incredibly costly due to the required number of clinical trials and FDA drug-approval processes, forcing them to price their products high once they do hit the market.
However, a recent “Jama Network Open” study has revealed that there is no discernible connection between the money spent on drug research and development (R&D) and market prices. The study found that even when accounting for research and development spending, the majority of the top drug companies earn billions of dollars in profit. Furthermore, these same drugs still made billions in profit in Europe where the same prescription drugs usually cost far less than in the U.S.
Pharmacy benefit managers (PBMs) that handle drug benefits for health insurance companies, Medicare and large employers also contribute to high prescription price drugs in the U.S. PBMs help to manage prescription medication benefits for employers, insurers and alternative medical care plan providers as part of the pharmaceutical drug supply chain.
However, the fees and incentives they charge for their services often increase costs for final consumers, and PBMs have been criticized for lack of transparency, competition and pricing issues.
Direct-to-consumer advertising, usually through the medium of video adverts, has seen pharmaceutical companies spend billions of dollars advertising their products. The U.S. is one of the only countries that allow drug advertising, and these marketing costs inevitably increase drug prices and raise demand for novel, highly marketed drugs.
Furthermore, newer, heavily advertised drugs tend to be more expensive than older drugs without necessarily being more effective, resulting in patients spending more on similar drugs.
The skyrocketing prices of prescription drugs create a need for more companies such as SOHM Inc. (OTC: SHMN) that focus on the production of generic medicines so that those in need can access more affordable alternatives for the health challenges that they face.
NOTE TO INVESTORS: The latest news and updates relating to SOHM Inc. (OTC: SHMN) are available in the company’s newsroom at https://ibn.fm/SHMN
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