every 3 approved drugs generates enough money to cover the development costs of

Every 3 approved drugs generates enough money to

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every 3 approved drugs generates enough money to cover the development costs of previous failures. This means that for a drug company to survive, it needs to discover a blockbuster (billion-dollar drug) every few years. After a drug is approved, millions of dollars are spent on marketing in educating healthcare providers and conducting post-marketing studies. Drug companies spend a lot of money on marketing because of the stiff competition they face from other drug companies for their drugs, and in order to develop each drug's highest revenue- generating potential. Given the poor odds of discovering another successful drug, it is more efficient to maximize the returns on a drug that is already on the market through advertising. In this sense, drug companies are no different than any other type of company. In addition to maximizing returns on their investment through advertising, drug companies also spend money to find new uses for drugs or better ways of using them. These efforts increase the use of the approved drugs and also benefit patients. Additionally, drug companies donate millions of dollars to charities and provide free drugs to individuals or countries that cannot afford medications. (Drugs, Why Drugs Cost So Much) In a nutshell, the price paid by a patient for a medication must cover the costs of
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3 Pharmaceutical drugs, why are they so costly? developing new compounds that become approved drugs and compounds that fail to become drugs, as well as marketing, post-marketing studies, and a profit. The profit ensures that the company provides a return to investors. Profit is the incentive for the risk that the company takes. Without the promise of a reasonable profit, there is very little incentive for any company to develop new drugs. There is no denying that drugs are expensive. However, the price of drugs should be weighed against their benefits. Since many drugs reduce pain and suffering, prevent disease, or extend life, they should be seen as miracles. Viewed in this light, and compared to other items that cost as much or more but do not provide the same level of benefit, drug prices may not be so unreasonable.(Drugs, Why Drugs Cost So Much) For patients with insurance requiring them to pay a significant percentage of medication costs, the priciest drugs can be unaffordable. Higher prices can trickle down even to those who now have flat co-payments, such as $30 per prescription, because as insurance plans incur higher costs, they usually increase the share beneficiaries pay in subsequent years. While it's clear drug prices are rising, many patients don't understand why. Here are six of the top reasons: 1. No price controls. The US government doesn't regulate prices, unlike many countries where government agencies negotiate prices for every drug. In the US, drugmakers set wholesale prices based mostly on what competing brand-name drugs cost and whether their new drug is better 2.
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  • Fall '15
  • Pharmacology, Generic drug, U.S. Food and Drug Administration, Food and Drug Administration, pharmaceutical drugs

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