“Why Drugs Cost So Much,” Peter Bach, The New York Times.

ELI LILLY charges more than $13,000 a month for Cyramza, the newest drug to treat stomach cancer. The latest medicine for lung cancer, Novartis’s Zykadia, costs almost $14,000 a month. Amgen’s Blincyto, for leukemia, will cost $64,000 a month. Cyramza costs the average Medicare patient $2,600 per month without supplemental insurance, more than most Medicare-age people earn each month, before taxes.

Bach points out prescription drugs cost about $300 billion per year. But the high prices are not just the result of the complexity of biology, stringent government regulations, and high expectations for profit among shareholders. Drug companies intentionally take advantage of laws that force insurers to include all expensive drugs in their policies regardless of their benefit or the existence of equally effective, cheaper alternatives. Bach also cites an article in The New England Journal of Medicine explaining that drug companies routinely purchase the rights to old, inexpensive generic drugs to lock out competitors and raise prices. The take-home message is that more rational drug prices would allow patients to spend their money in ways that may benefit their health more optimally, and less on expensive, marginally effective treatments.

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