Prescription drugs for chronic illnesses carry serious financial burden for Americans, even for those with decent health insurance coverage. The inflated prices do not remotely compare to the prices imposed in other countries. There are numerous reasons for it, but the biggest misconception lies in the myths that the research, development and production cost has to be distributed among the recipients of the drugs in order to keep the manufacturing afloat satisfying the medical demands of the industry.
The most common reason given for high retail prices is that obtaining the approval from the FDA is a lengthy, complicated and expensive process. That perception originates from the fact that the development of the medications takes millions of dollars. Average cost of prescription drugs in America is estimated to be as high as 10 times more than in other countries around the world. The justification for it comes from the drug companies which dispute that they have to recover the money they do not obtain in other countries by charging higher prices in America.
In reality, the pharmaceutical corporations are allowed to charge any price without limits as there are no specific rules and regulations about the drug rates. Medicare is obligated to pay exactly what is charged without negotiations. The same principle applies to other insurance companies in America; whereas in other countries, the government caps the cost at a certain level basing their decision on what the actual benefits of the drugs are.
The drug companies are protected by US laws from free-market competition allowing the pharmaceuticals to be sold at outrageous prices. Any additional cost is absorbed by the taxpayers who make up the difference between the prices charged in other countries and the prices charged in US. Study conducted by AARP in 2014 show that in 2013 alone, the prices of drugs surged by 12.9 percent, and the predictions for the future disclose ongoing continuance of the trend.
To date, American consumers are the biggest spenders on drugs next to Canada in second place. The statistics show that American population tends to use more medications in comparison with other countries where the natural remedies prevail before the use of drugs. That creates the need for the production of new drugs. As a result, new side effects are created along with the use of newly manufactured drugs, and in domino effect, more drugs have to be developed to treat the side effects.