Drug costs

I seem to always come back to this issue.  Heck I work in a pharmacy and some of the prices for prescription drugs are outrageous.  But I will continue to revisit the issue as drug prices do not need to be this high.

Drugs cost a lot due to a number of things.  You have the obvious shipping and handling costs, liability insurance if something goes wrong, and of course profit motivation so that the companies that make these drugs can stay in business.  Then there is federal regulations which does testing, dictates how drugs are shipped and handled, and basically controls every aspect of production to sale to the person with a prescription.  Actually, the federal regulations in my opinion increase the cost the most because you have things like generic Flonase (the allergy nasal spray) costing $200 for the original prescription version, but the OTC version (which is exactly the same drug) costs $26.  That is a major contrast.  It went down to just $26 just by the regulations by the federal government being eased up because the drug is no longer a prescription item.  So if the drug Flonase is just as safe as an OTC with its regulations as it is as a prescription drug and its more numerous regulations, does that mean that we can reduce, or even taper down federal regulations from year to year that do not add to the maintenance of the quality and safety of a drug.  That alone would reduce drug costs.  Another method that deals with the regulation problem and saves money is by accepting drugs from other countries with equivalent or superior safety regulations.  This would save money for drug companies to get their drugs to the market faster if the drug is approved in Britain or Sweden first as the United States (last I heard in 2007) has the most numerous regulations in the world which adds onto the cost of everything.  Or we can just make a bunch of drugs OTC's and save a lot of time and hassle.

With regulations reduced or adjusted to meet real world safety standards for new drugs, and potentially adjusted for drugs on the market for a specified number of years, costs will go down dramatically.  But this is not enough.  Patent laws are one of the biggest issues we face with respect to drug costs.  Most U.S. drug patent laws give drug companies a 10 year window of ownership of a certain drug formula with the potential for renewal.  However, almost seven years of that 10 is all research and development for that drug of which over 70% of those potential drugs never making it to market.  So when a drug finally goes on the market after 7 years of development the drug company has to make up the costs for all the money invested into the drugs cost and all the failed drugs too.  As such, by removing this 10 year monopoly on a drug formula we actually slow development, but at the same time free up time constraints on the drug company.  This means the drug will go to market at the same time as the patent kicks in, meaning the drug company will now have ten years to make up the enormous costs rather than three, thereby distributing the cost over time. 

Another way to make drugs cheaper is to eliminate labor costs or even the production of drugs at the drug company’s factories all together.  This can be done by 3D printer technology.  Already approved in the United States for certain drugs, 3D printers eliminate 90% of the labor costs at the drug factories themselves.  To eliminate manufacture of drugs at the factories, the drug company can license pharmacies equipped with 3D printers to make the drugs there in house.  Thus the cost of materials, and labor shift to the pharmacies which means drug companies do not have to worry about labor or shipping costs which reduces the costs to produce the drugs as a whole and potentially reallocating the saved money for research and development costs.

Final Thought:  Some of the regulations on drugs also apply to medical devices and products.  Therefore, eliminating costs or reducing the things that artificially increase costs aid in making medicine cheaper for all.