5 Methods Pharmaceutical Companies Use To Increase The Price Of Drugs

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Former Secretary of Labor Robert Reich wrote an article on AlterNet about several methods pharmaceutical companies use to increase the price of drugs:

1. Charging the consumer more: Drugs account for 10 percent of total healthcare spending, which consumers pay through taxes and “higher co-payments, deductibles, and premiums.”

2. Product hopping: Companies make a small alteration to their medication, which allows them to retain their patent and prevent a generic version from being developed

3. Aggressive advertising: Only in the US are pharmaceutical companies allowed to directly advertise their medication, which allows them to keep a monopoly on the medication even after their patent has expired

4. Pay-for-delay: Pharmaceutical companies pay generic drug companies to delay the release of the generic version of the medication

5. Stopping the government form intervening: In exchange for the support of pharmaceutical companies on the Affordable Care Act, the US government agreed to not use its power to negotiate lower pricing on medication.

According to Reich, “the public isn’t outraged. That’s partly because much of this strategy is hidden from public view. But I think it’s also because we’ve bought the ideological claptrap of the “free market” being separate from and superior to government. And since private property and freedom of contract are the core of the free market, we assume drug companies have every right to charge what they want for the property they sell. Yet in reality the “free market” can’t be separated from government because government determines the rules of the game.”

Summary by MedicalGroups.com

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