Why Do Drugs Cost So Much?

The Pharmaceutical Research and Manufacturers of America (PhRMA) says it costs $1.3 billion to bring a new drug to market, and researchers dispute the lobby's claim. Could the ponderous costs of clinical trials, increasing regulation, a burgeoning FDA, and a litigious society keep driving drug prices up?

Perhaps we should we go back to simpler times, like 1895:

"The Cost of Making Antitoxin In the District:

Health Officer Woodward appeared before the Commissioners on the 10th inst., and submitted the following estimate for the suppression of contagious diseases: For the production of antitoxin for the treatment of diphtheria:

  • twelve horses at $40 each, $480;
  • maintenance of twelve horses at $10 each per month, $1200;
  • bacteriologist, $1,800;
  • materials and apparatus, $320;

Total: $3,800."

-The Journal of the American Medical Association Vol. XXIV, January 19th 1895: Miscellany.

It was the horses, obviously, driving costs up. Or perhaps they overestimated the cost of horses to support resistance to cheaper imports and generics, and to justify raising drug prices...

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