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The mechanism by which a drug’s market price is fixed is opaque and mostly arbitrary. Medical research, particularly new drug discovery, is a very expensive endeavour; the drug industry uses this argument to price new drugs at levels that are breathtakingly high. With the backing of currently enforced patent protection laws, drug companies can insulate themselves against market forces that are operational in most other consumer markets where competition assures reasonable prices. The Indian drug industry which used to pride itself on its ability to reverse engineer and deliver generics substitutes at low prices, can no longer indulge in this tactic.
Cancer treatment is a large area of interest for drug research. Unlike other noncommunicable diseases like hypertension, diabetes and the like, patients with a diagnosis of cancer are usually keen to seek the best available treatments. Newer generations of cancer drugs are priced at astounding figures. Treatment costs can exceed 100,000 US dollars a year. Even for those in wealthy, developed nations, the burden can lead to far reaching domains: a complication that has been labeled as “financial toxicity”.
The slide presentation that follows and the Youtube clip at the end of it from a “60 minutes” episode, outline the nature and ramifications of this problem.