Why Are Life-Saving Drugs So Expensive?

When Turing Pharmaceuticals raised the price of a life-saving drug from $13.50 to $750 a pill, it brought the issue of high drug prices to the spotlight. The prices of many important drugs have been rising for decades, and drug companies are able to set prices freely for drugs in this country, often leading to prescription drugs costing far less overseas. For this week's Please Explain, we are discussing drug prices: examining the history behind the reasons that drug companies charge what they do for prescription drugs, and if there is anything that government can do to make drugs more affordable in this country.

Melissa Thomasson, professor of economics at Miami University’s Farmer School of Business, is a Research Associate for the National Bureau of Economic Research, and her work on the economic history of health insurance and health care has been published in top journals. 

Peter Bach is the Director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center. He is a physician, epidemiologist, researcher, and healthcare policy expert whose work focuses on the cost and value of anticancer drugs.