Why Prescription Drugs Cost so Much

You go to the doctor and pay an arm and a leg for a diagnosis; the last thing you expect to do is pay your other arm and leg for your medication. You wonder, why is my medicine so costly? And especially for those of you without insurance, you wonder how you will afford it at all. The answer is simple, but the solution is not.

A prescription drug takes years to reach the market. The Food and Drug Administration (FDA) mandates a lengthy approval process for medication to be taken by humans. Our system of new drug approvals is the most rigorous in the world, which means most drugs that make it to us are safe and effective. But discovering and developing these medicines is a long, difficult, and expensive process. This process includes preclinical trials, clinical trials, and postmarketing studies. It takes, on average, 12-15 years, and $500 million for a new drug to reach us. Of the 5,000 to 10,000 compounds tested in preclinical trials, 5 of those make it to the clinical trials. And only 1 out of 5 are approved for sale. The compounds that are left behind are thrown out, and the pharmaceutical company is out of the money.

So how does this process work, and why is it so long? Well, first the pharmaceutical company must discover a new drug. It sounds simple enough, but this takes several years. Scientists test chemical and biological compounds to identify pharmacological activity to make a new medicine. Basically, they play with a lot of mixtures until they find one that might actually work. During preclinical trials, this product is tested in a laboratory and in animals. These trials last about 4 years. Scientists must identify the drug's properties to determine if the drug will be reasonably safe for humans. Once they are confident we can consume the new medicine, they file an Investigational New Drug Application (INDA) to ask the FDA for permission to test it in humans.

Once the FDA approves the INDA, clinical trials will begin. These trials have three phases that include people who volunteer to take the investigational medicine. These people participate because they believe the trials offer them the best quality of care for their disease. They also believe by participating they will recieve more and better attention for their disease. (The FDA states that people should not enroll in clinical trials for compensation because they may overlook the risks.)

Phase One of clinical trials takes about 1 year. 20-100 healthy volunteers are recruited to take the drug on a regular basis. This determines the action of the drug within humans, and a safe dose for us to consume. Phase Two takes about 2 years and involves 200-300 people who have the disease or medical condition the medicine is supposed to treat. This will determine the effectiveness of the drug and any side effects or risks of the drug. Phase Three takes 3 years with 1000-3000 people who have the disease or medical condition the medicine is supposed to treat. This stage will verify the effectiveness of the drug. Common side effects and more serious adverse reactions are charted within this phase. If the drug presents more of a risk than a benefit in any phase, the pharmaceutical company will stop the process and start over. This means all of the time, effort, and money put into the investigational drug will be obsolete.

If the drug makes it through all three phases of clinical trials, a New Drug Application (NDA) is submitted to the FDA to ask permission to market the drug. The FDA has 6 months to review the results of the trials and decide if the medicine is safe and effective. If approved, the medication will be manufactured and can be prescribed to us. The pharmaceutical company is awarded a patent for the new medication for 17 years, which means no other company may make a generic drug until this patent expires. This also means you will be charged an arm and a leg for your prescription because the pharmaceutical company is trying to make a profit after spending 15 years and $500 million to get the drug to you.

And it's not over yet. The last stage is postmarketing studies, which will continue for the life of the drug, as long as it's on the shelf. These studies monitor the use of the medication. Periodic reports are sent to the FDA including problems with the drug that were not discovered during clinical trials. Again, if the risk is more than the benefit, the drug may be pulled from the shelf, and the pharmaceutical company is out of the money.

So 15 years and $500 million later, the pharmaceutical company must sell their new brand name product at a price to gain a profit so they can keep the process going. Out of the 10,000 compounds tested, only 1 will make it to the shelf. To earn the money back that was invested in the lengthy approval process, the pharmaceutical company is awarded a 17 year patent, which means you will be paying an arm and a leg for your prescription for several years. So next time you worry about the cost of your medicine, remember the FDA mandated drug approval process pharmaceutical companies must go through to manufacture a new drug. And without them and this process, we wouldn't have safe and effective medicines to make us healthy and able to function. Next time you wonder about the high cost of medicine, don't just blame the pharmaceutical companies, but also wonder about why insurance companies and the government haven't done anything to help you.