5 Reasons Why Pharmaceutical Prices Are On The Rise
Pharmaceutical expenses are important to a lot of persons.They can be a matter of life and death.Currently there is a number of rises in products like these. A lot of people are suffering from the hike of prices because they depend on the drug to either cure them or treat their ailments. It is a sad matter that hugely affects the young as well as the old people in society. It is everyone’s hope that the affected are able to take their pills without the stress of the hiked prices on their pockets or using their insurance. The following are the factors that affect Pharmaceutical prices.
Little or no regulation of prices.Particularly in the US, the government is not involved in any cost regulation of pharmaceutical products. A lots of countries send their officials to bargain each drug going in the market. Not having a proper mechanism to set the costs pays a part in the reckless pricing. The consumers stand no chance against such companies. This puts a strain on the pockets of patients and the drug companies pocket millions in profit.
The industry has very low competitor.a number of drug problems there is little contest in the market. The basic drugs manufactured decades ago were very cheap, resulting in low profits. This is not attractive to a lot of companies so they came up with new drugs and stopped manufacturing the old types. The companies ended up being the only ones making the drugs making them majority shareholders. This as a result made the prices be very high.
The undersized market dimension. A large number of drug products are manufactured for special ailments or cancer types, so they only assist few people. The manufacturers try to cover the development cost by hiking the prices.This directly affects how the market pricing on the end products will be. In instances that the market is small but the price to develop the drub is huge, the end price will be high.
The makers of the pharmaceutical products claim that research is very costly. The professionals tell us that it can take up to ten years and over a billion dollars for a single product to be approved .This really shoots up the prices of the end product.The people in the science lab spend millions of dollars carrying out their research.This yields the end product to be very high thus to meet the already spent money.
Patents have long duration The patents give manufacturing ownership to companies that make the product. The ownership rights can last for decades.This gives the company all the rights of development and pricing that later affect the industry.