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<blockquote data-quote="TorqPenderloin" data-source="post: 1481693" data-attributes="member: 211504"><p>Figures like that are technically true but almost no one pays those kinds of numbers. That's a big part of the problem.</p><p></p><p>Drug companies have to stay in business and it's extremely expensive to get a drug approved by the Food and Drug Administration. Once it's approved, they then have to market it which is why diabetes commercials seem to run on every TV channel.</p><p></p><p>Health Insurance plans pay the bulk of the retail cost. However, they try to negotiate better prices with the drug companies. That only drives the retail cost up further.</p><p></p><p>-So you have a drug company that may retail a drug for $100.</p><p>-Their margin may be $99.85 on that drug.</p><p>-However, they likely had to spend millions of dollars on years of trails and testing. That brings the margin down to $80 (and usually much much lower at first)</p><p>-Then subtract their Marketing and SG&A expenses so doctors and patients can learn about it. That brings the margin down to $50</p><p>-Then they have to negotiate with insurance companies that want better pricing if they use that company exclusively. Cut the margin down to $25</p><p>-Then the pharmacy wants their cut who are private companies that distribute drugs. That brings it down to $15</p><p>-I believe that patent laws only allow a drug to be protected for 12 years in the US so that also means they're on a time clock before other companies can produce a generic version.</p><p></p><p>At that point you have a drug that may cost 15 cents to manufacture, but so much money is distributed out to different places that the drug company isn't making nearly as much as it seems.</p><p></p><p>Unfortunately, what happens is that a small portion of the population within the USA don't have insurance and/or make too much money to qualify for government assistance so they're stuck paying those retail prices.</p><p></p><p>Even still, there are plenty of generic drugs available for a very low cost. A vial of insulin can be had here for about $25 which could last you more than a money.</p></blockquote><p></p>
[QUOTE="TorqPenderloin, post: 1481693, member: 211504"] Figures like that are technically true but almost no one pays those kinds of numbers. That's a big part of the problem. Drug companies have to stay in business and it's extremely expensive to get a drug approved by the Food and Drug Administration. Once it's approved, they then have to market it which is why diabetes commercials seem to run on every TV channel. Health Insurance plans pay the bulk of the retail cost. However, they try to negotiate better prices with the drug companies. That only drives the retail cost up further. -So you have a drug company that may retail a drug for $100. -Their margin may be $99.85 on that drug. -However, they likely had to spend millions of dollars on years of trails and testing. That brings the margin down to $80 (and usually much much lower at first) -Then subtract their Marketing and SG&A expenses so doctors and patients can learn about it. That brings the margin down to $50 -Then they have to negotiate with insurance companies that want better pricing if they use that company exclusively. Cut the margin down to $25 -Then the pharmacy wants their cut who are private companies that distribute drugs. That brings it down to $15 -I believe that patent laws only allow a drug to be protected for 12 years in the US so that also means they're on a time clock before other companies can produce a generic version. At that point you have a drug that may cost 15 cents to manufacture, but so much money is distributed out to different places that the drug company isn't making nearly as much as it seems. Unfortunately, what happens is that a small portion of the population within the USA don't have insurance and/or make too much money to qualify for government assistance so they're stuck paying those retail prices. Even still, there are plenty of generic drugs available for a very low cost. A vial of insulin can be had here for about $25 which could last you more than a money. [/QUOTE]
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