Did you know prescription drugs cost significantly less globally compared to the U.S? Medicine has been around for many centuries. The earliest versions were various natural remedies originating from medicinal plants, which could all be obtained for free or at a minimal cost. However, drug pricing in America makes it difficult for many citizens to obtain these drugs. So why are drugs so expensive in America? Prescription drugs were a new thing in the early 1900s. In 1921, insulin, a normal enzyme that helps metabolize glucose in the body, was discovered by Canadian scientist Frederick Banting. He sold the patent to the University of Toronto for $1 thinking that this would help save many diabetic lives. While many people think medicine is affordable, sadly insulin is now one of the most expensive liquids in America based on volume. Pharmaceutical companies now have a monopoly on insulin in America today as they bought the patent. The high cost of drugs is making them inaccessible in America. Drug pricing has skyrocketed, because of the insurance policies and also pharmacy benefit managers, PBM’s.

One reason why prescription drugs are so expensive in America is because of PBMs. PBM’s are middle-men who negotiate drug prices between drug manufacturers and consumers. They often help start the process that makes drugs expensive. Rebates which are discounts also help PBM’s ,when they get secret rebates from the company they work for and also help hide the real price of a drug.  For example, “In a transaction between a pharmacist selling a drug to a patient, the pharmacist would have given the drug for $4. However, the patient used an insurance plan which cost him $12.34. There was also a PBM who got involved and he got $8.34 of the transaction(Minhaj).” This shows how the PBM got more than a 100% rebate from the company they were working for and without this report, it would be very complicated to figure out how much the PBM received due to contracts and privacy concerns. Insurance companies are companies you pay who discount different drugs depending on your insurance plan. The list of drugs they discount is called a formulary. Insurance plans usually show your formulary for prescription drugs but there is also another group of drugs. Many people often opt for some drugs called OTCs which are misknowningly advertised as cheaper than prescription drugs. OTCs stand for over the counter and not covered by your insurance. OTCs are available at many local pharmacies like Walgreens and CVS. For example, “Americans are likely spending too much for their over-the-counter, OTC, products. In many cases, these medications and devices cost more than their prescription counterparts. In fact, these three OTC products cost more than prescriptions(Matthews).” This shows how Americans don’t have many other options for buying drugs other than prescription since OTCs cost even more than prescription drugs.

While many drug companies claim that R&D (research and development) of new drugs can cost close to a billion dollars so they need to set high prices to make a profit, statistics show drug companies make several billion more in profit after R&D. For example, “The pharmaceutical industry claims that the high prices of new drugs are necessary to fund ongoing research and development (R&D) maintaining that it costs $800 million to develop a new drug. However, an independent estimate places the R&D costs for a new drug at half the industry's claim. Most core research for drugs is actually funded by the federal government…(Porter).” This shows how not only does it cost half of what drug companies claim, the federal government pays for most of R&D. Drug representatives have argued that these are standard prices globally in developed countries. In fact, research shows, quite on the contrary, America has the highest drug prices in the world. This isn't the case in other countries where drugs are very cheap. According to NPR, a box of insulin is $700 here but that same box in Germany would be $73. Insulin still wouldn’t be cheap there but would be drastically cheaper. This is a great example of how American drug manufacturers price gouge despite receiving government aid and tax breaks. Although drug companies may not admit it, this is how they form monopolies and regulate drug pricing in America.

Drug pricing in America is undeniably high and affecting people all across the country. People are dying everyday since they have to choose between their medicine and other expenses like food or rent especially now. With crucial drugs like insulin priced insanely high, people have no way to attain these drugs. Unfortunately, drug companies have been doing anything to keep their monopolies from donating money to Congressmen to using PBM’s to hide the real cost of prescription drugs. Several political leaders across the spectrum are attempting to bring change like Donald J Trump once said, “One of my greatest priorities is to reduce the price of prescription drugs.”  If these politicians use their emergency power to break drug patents or establish price capping, they could potentially solve the drug pricing crisis of America.

Works Cited

"Drug Pricing with Hasan Minhaj." Youtube, uploaded by The Patriot Act, 17 Feb. 2019, www.youtube.com/watch?v=z7LgT4_jkLA. Accessed 22 Jan. 2021. (Minhaj)

Gale In Context: Opposing Viewpoints, link.gale.com/apps/doc/EJ3010576224/OVIC?u=nysl_li_herrkmsl&sid=OVIC&xid=e2268ae9. Accessed 23 Jan. 2021. (Porter)

Healthcare in America. 25 Apr. 2018, healthcareinamerica.us/three-over-the-counter-products-likely-to-cost-more-than-a-prescription-ded6fc0412cb. Accessed 22 Jan. 2021. (Matthews)

American Travelers Seek Cheaper Prescription Drugs In Mexico And Beyond, 11 Feb. 2018,
npr.org/sections/health-shots/2019/02/11/691467587/americans-seek-cheaper-meds-in-mexico. Accessed 23 Jan. 2021.(NPR)