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Prescription Drug Costs

- May 20, 2016
Do research expenses justify eye-popping prices?
  • Overview
  • Current Situation
  • Chronology
  • Pro/Con
  • More...
Featured Report

Recent high-profile Senate hearings have highlighted a phenomenon many Americans know well: the soaring price of prescription drugs, some needed to keep patients alive. New blockbusters routinely cost more than $100,000 for a course of treatment, and similar “me too” drugs for the same conditions later launch at almost identical prices. Drug manufacturers blame the rising cost of research and development, but critics blame excessive profit-seeking and exorbitant marketing budgets. Meanwhile, prices for some common, decades-old generics also are rising as competition in that part of the industry collapses. The price of the antibiotic tetracycline, for example, rose more than 7,500 percent in two years. A majority of Americans say keeping drug prices affordable should be the top national health care priority, and all three remaining presidential candidates have promised relief. To help slow the rising costs, states are introducing bills and ballot measures to require drug makers to disclose their actual costs and, in some cases, cap prices.

Price Controls

At least 11 states are considering bills to raise pricing disclosure requirements.

Sticker Shock

Makers of expensive hepatitis C treatments face scrutiny over pricing.

Congress Debates

Democratic House members seek to withdraw companies’ marketing rights to unreasonably priced drugs.

1850s–1905The heyday of patent medicines ushers in widespread, unregulated advertising.
1906–1959Congress regulates drugs and investigates drug companies' wrongdoing.
1980–1984Biotechnology revolution and other innovations send new-drug prices higher.
1987–PresentHigh and sharply rising drug prices prompt calls for reform.

Should Medicare be allowed to negotiate drug prices?


Peter S. Arno , Michael H. Davis
Senior Fellow and Director of Health Policy Research, Political Economy Research Institute, University of Massachusetts, Amherst; and. Professor of Law, Cleveland State University.


Douglas Holtz-Eakin
President, American Action Forum; Former Director, Congressional Budget Office.
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