The Shocking Truth Why Prescription Drug Prices Are So High

It’s no secret that prescription drug prices are at an all-time high. Americans are spending just under $1,000 each year for prescription drugs. Listed below are the top five real reasons why these drugs cost Americans so much.

  1. You’re paying for all of the drugs in America.
  2. You’re paying for all of the drugs in the world.
  3. You’re paying for expensive marketing and advertising campaigns.
  4. You’re paying for somebody’s fat corporate bonus.
  5. You’re paying taxes on it too!

1.) You’re paying for all of the drugs in America.

Unfortunately, it’s impossible to just pay for one prescription. The cost of prescription drugs falls on everybody’s shoulders. Drug development is a vast and wide-reaching business. Drug prices cover research and development for a lot of drugs that may not even make it to market. Patients absorb those costs. It takes almost 15 years to bring a drug to market. Americans are paying for these drugs to be developed. Most of these drugs never see the light of day. In fact, only one in about 50 drugs will get to market and an even smaller percentage actually make profits.

2.) You’re paying for all of the drugs in the world.

Unfortunately, Americans subsidize drugs for the rest of the world too. Our high drug costs help to cover prescriptions drugs in third-world developing countries. Price controls are established in other countries. That means that pharmaceutical companies cannot legally raise drug prices. There is no price control in America. American pharmaceutical companies can raise prices legally, so Americans pay extra.

3.) You’re paying for expensive marketing and advertising campaigns.

Pharmaceutical companies are incredibly competitive. Pharmaceutical marketing is a multi-billion dollar business. Pfizer’s marketing budget was over $622 million dollars last year. A research firm, Cegedim, reported that total pharmaceutical industry marketing budgets were close to $28 billion in 2010. Marketing is more than just television and print advertisements too. The budget can also include money for online advertising, physician promotions and direct-mail campaigns. What happens when pharmaceutical companies misrepresent their products in marketing campaigns? Consumers also pick up the tab for expensive lawsuit settlements.

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Different Types of Pharmaceutical Marketing Strategies and Campaigns

  • Print advertising
  • Television advertising
  • Online advertising
  • Direct-mail campaigns
  • Targeting doctors
  • Turning patients into consumers

4.) You’re paying for somebody’s fat corporate bonus.

It’s no secret that the big pharmaceutical industry is rolling in money. Prescription drugs are a profitable business. Drug prices go up, and corporate executives get large bonuses. In fact, pharmaceutical companies continue to make record-high profits, even during a recession. Pfizer ranks at the top of the Dow index, with an incredibly high profit margin of almost 27 percent. Pfizer isn’t even the pharmaceutical company with the highest profit margin either.

5.) You’re paying taxes on it too!

It comes as no surprise to most Americans, that they are also paying taxes on these prescription drugs. Prescription drug prices are high for a variety of reasons, and taxes don’t help the situation. Consumers can’t expect taxes to be paid from billion dollar corporate profits or large marketing budgets. Unfortunately, big pharmaceutical companies are passing the buck onto the consumers. This may be disturbing news for many Americans who are already paying close to $1,000 out of pocket each year due to rising drug prices. The good news is that in 2012, Americans actually spent about one percent less on prescription drugs than in recent years. There is hope for patients who are under-insured or uninsured. Shoppers should consider checking prices at Since 2006, has been helping the under-insured and the uninsured get safe access to affordable medications. By using’s free drug price comparison tool, you can expect to save between 50 and 80 percent off of U.S. retail prices.

About Cary Byrd

eDrugSearch founder, Cary Byrd, has been called an “e-health innovator” by MarketIntellNow, interviewed by top pharmaceutical industry journalists, invited to Matthew Holt’s Health 2.0 Conference and a Consumer Report's health summit, and highlighted on numerous health blogs.

The Shocking Truth Why Prescription Drug Prices Are So High

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