How medicine pricing works

The cost of medicine is one of the reasons many people are in debt. There are many steps in the process of developing or improving a drug product. However, it shouldn't cost like precious silver and gold if it is meant to answer a medical problem. Margaret L. Salmon.

It starts with research. The discovery of a new compound that affects a medical condition, be it natural or synthetic, is the first step to the development of drugs. Its first phase includes research into the biological and chemical qualities of the discovered compound, determining its effect and safety. The following step requires researchers to test the drug in the laboratory with the use of cells on tissues and animals. Margaret L. Salmon.

If the compound is proven safe on animals, it can then be tested on a small group of people who are healthy and willing volunteers to verify the information from the previous step. In addition, this phase shall provide more information on the effects of the potential drug. Once the compound is tested on individuals with the medical condition for which it must be used, the manufacturing company can apply to the Food and Drug Administration for a license to manufacture and sell. Margaret L. Salmon.

Developing a new drug requires five to seven years, and approximately $500 million, before applying for an FDA license to manufacture and sell the drug, with the uncertainty of being approved. If the drug doesn't meet the FDA's requirements, $500 million will be a company loss. The price of a patient's medication has to cover the manufacturing company's drug development expenses. Margaret L. Salmon.