Profit or Life?
The power of the pharmaceutical companies
Pharmaceutical companies receive substantial U.S. government assistance in the form of publicly funded basic research and tax breaks, yet they continue to charge exorbitant prices for medications.
Pharmaceutical companies also benefit from research and development tax credits as well as a tax deduction for their marketing and advertising expenses. They have employed tactics such as evergreening to prolong a drug’s exclusivity. When evergreening, pharmaceutical companies make certain modifications to a drug such as changing its chemical composition slightly or making an external change as minor as adding a stripe to a pill in order to preserve their patents.
Over 60% of newly approved medicines in the US are developed by small biotech companies or universities. Pharmaceutical companies today frequently act as capital providers, cooperating with universities or buying up biotech companies. A paradigm shift has taken place in the pharmaceutical industry: Whereas high drug prices used to be justified by research costs, the industry is now using the value of gained lifetime to argue its case. Pharmaceutical companies have also stated that the prices are high because the drugs are difficult to manufacture.
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