High Prices: How to Think About Prescription Drugs

Malcolm Gladwell pens a very useful look at prescription drug costs:

In the political uproar over prescription-drug costs, Nexium has become a symbol of everything that is wrong with the pharmaceutical industry. The big drug companies justify the high prices they charge–and the extraordinary profits they enjoy–by arguing that the search for innovative, life-saving medicines is risky and expensive. But Nexium is little more than a repackaged version of an old medicine. And the hundred and twenty dollars a month that AstraZeneca charges isn’t to recoup the costs of risky research and development; the costs were for a series of clinical trials that told us nothing we needed to know, and a half-billion-dollar marketing campaign selling the solution to a problem we’d already solved. “The Prilosec pattern, repeated across the pharmaceutical industry, goes a long way to explain why the nation’s prescription drug bill is rising an estimated 17 % a year even as general inflation is quiescent,” the Wall Street Journal concluded, in a front-page article that first revealed the Shark Fin Project.