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.