The $100,000-Per-Year Pill: How US Health Agencies Choose Pharma Over Patients

Don Reichmuth survived prostate cancer once before, back in 2007, so his physician was concerned when tests recently revealed the cancer had returned. Reichmuth's physician prescribed a drug called enzalutamide, marketed by the Japanese company Astellas Pharma, Inc. under the brand name Xtandi. But when the physician sent the prescription to the pharmacy, the managers of Reichmuth's insurance plan sent back an immediate refusal to approve it.

Reichmuth, a retired teacher who lives in Washington State, was puzzled by the logic. Then he learned the price of the Xtandi prescription: over $9,700 each month. Reichmuth is just one of millions of Americans who are experiencing prescription drug sticker shock. There are the extreme high-profile examples, like the former hedge fund manager Martin Shkreli hiking the price of a critical toxoplasmosis drug by 5,000 percent overnight, or a new hepatitis C medicine costing over $1,000 a pill. But the issue extends beyond the headlines. 

Pharmaceutical corporations consistently set most of their prices hundreds of times higher than their manufacturing costs, then relentlessly raise those prices at rates far exceeding inflation. The result is breathtaking corporate profits as high as 42 percent annually. The industry's average return on assets more than doubles that of the rest of the Fortune 500. Meanwhile, many US seniors are forced to choose between paying for medicine or food...