By Andrea Lyn Van Benschoten, Web Content Editor
We’ve all heard it. Maybe you’ve even experienced it. Patients unable to afford their medications. Family members research ways to get support for loved ones. More and more pharmaceutical companies are offering co-pay support for medications that are very expensive or have a high out-of-pocket cost to the patient. Some physicians can hand out “sample packs” to patients when trying a new medication.
“How can they do that? Don’t they know people can’t afford these meds?”
According to research in 2014 by Tufts Center for the Study of Drug Development, developing a new prescription medicine that gains approval, a process that can take more than a decade, is estimated to cost $2.5 billion. On the other hand, the JAMA Network claims it costs far less with a single cancer drug totaling $648.0 million to develop.
So which number is accurate?
Well, that’s hard to say.
For each medication success, it is hard to say know many failures preceded it. The Pharmaceutical Research and Manufacturers of America (PhRMA) has developed a section of their website called “Let’s Talk About Cost,” which specifically looks this issue and how the industry can make medicine more affordable.
Ultimately, when patients and their families can’t afford needed medications, it is torture.
Patients need access to medications. Pharmaceutical companies need to cover all the costs associated with research, development, and approval for each new medication. Additionally, these are private companies, who need to turn a profit.
“Well, how much do these companies need to make?”
Profit margins for pharmaceutical companies have a wide range. According to the U.S. Government Accountability Office, about 67 percent of all drug companies saw an increase in their annual average profit margins from 2006 to 2015. Among the largest 25 companies, annual average profit margin fluctuated between 15 and 20 percent.
Overall, the average profit margin was 17.1 percent in 2015 for all drug companies.
Is 17.1 percent an acceptable profit margin for a pharmaceutical company? As PhRMA comments in their information, it is a complex issue that requires understanding by both patients and pharmaceutical companies. Ultimately, patients need to afford life-saving medication without going into bankruptcy and pharmaceutical companies should be allowed to make a profit.