ABSTRACT
Pharmaceutical companies have long been the subject of controversy for their ability to set high prices for patented prescription drugs. The United States popular press often cites the rise in average wholesale prices (AWP) for pharmaceutical products over time as contributing to decreased patient purchasing power and escalating prescription drug expenditures. Public advocates argue that drug prices are unaffordable to the average American consumer, particularly the uninsured elderly. However, with the exception of Medicare beneficiaries without drug coverage and the uninsured without Medicaid, much of the US population has some form of drug insurance benefit and rarely pays a price as large as AWP for necessary medication. Rather, these people purchase prescription drugs based on a schedule set by insurance companies, not pharmaceutical firms.
