ABSTRACT
It may surprise some readers to learn that the pharmaceutical industry benefits from extraordinary government protections that guarantee substantial profit margins. For many years, pharma companies have been justifying the high prices they charge for their products based on the high costs of R&D, the high risks associated with investigating potential new compounds and the length of time associated with drug development. The industry fails to mention the tax benefits they receive, which include a 50% tax credit, amounting to a government subsidy that pays half of pharma’s R&D costs! Consequently, the industry’s arguments relating to their reasons for the prices charged for new products appear questionable and misleading.
Despite the pharmaceutical industry’s high level of profitability, pharma companies regularly hike up the prices of many commonly prescribed drugs by double and triple cost-of-living increases in the U.S. A user fee system for reviewing new drug applications is also provided by pharma companies to regulatory agencies raising disturbing questions about pro-industry bias in the review of new drug applications and post-launch monitoring. This paints a picture of a seemingly greed-driven industry that has lost sight of its mission goals to advance curative medicine while improving the length and quality of life.
