Pharmaceutical Drug Pricing

We're very fortunate to live in a society where we can simply request any medicines we want, whenever we want. Have a headache? Simply get some over-the-counter painkillers! There's a ton of different over-the-counter drugs.

However, what about drugs that treat rare diseases? How do these affect the economy and how are they priced? Oftentimes, large companies that produce these drugs simply stop producing them because they don't feel it's making them any profits, and instead focus on making drugs that benefit the majority of people. The opportunity cost of producing these drugs was too high for the companies.

However, in the 1980s, an act was passed by the government because they saw this issue and how it affected people. It was called the Orphan Drug Act, and it did a few things, like providing a 50% tax credit for clinical testing expenses related to drug development, waiving some regulatory fees for drug companies, and providing grants to drug companies for research and development.

Without this act, we would have many people that would not have any medicine to cure their rare diseases. However, there's still one major issue—pricing of these rare drugs. Now that the companies are making them, there is no price cap to these drugs, oftentimes forcing those in need to pay ridiculously high amounts. There is not much competition in the drug industry; there might even be a large oligopoly between the large over-the-counter drug firms like Walgreens and CVS. While this situation has gotten better over the last few decades, there are still a lot of things that need to be done.

https://www.gaucherdisease.org/blog/drug-pricing-a-complex-issue-affecting-the-rare-disease-community/