US spending on specialty drugs alone reach $400 billion... WOW

Why do new prescription drugs cost so much the simple reason because they can, drug companies are often treating rare genetic diseases, unusual types of cancer and other diseases with few competing therapies, which gives them a near monopoly and thus pricing power. For instance, take Bristol Meters squib's cancer drug yearvoy, which was the first new medicine approved for the treatment of advanced melanoma in more than a decade. It cost around 30 thousand dollars per injection and a round of treatment is four injections, so the total cost is around 100 and 30 thousand dollars.

Another reason for high cost, drug companies try to make as much money as they can on medicines before the patents run out. Once the patent on the drug expires, generics can enter the market and the prices will decline. The research and development costs is another driver of price. On average, it takes about 12 years for a drug to go from pre-clinical research to market. In the US, the FDA requires new drugs to go through three phases of clinical trials before it can enter the market. These tests are timely and costly, and most drugs fail. 

For the drugs that do make it to market, companies will often look at what existing drugs for the same conditions, cost and price accordingly. This means that prices for a category of similar drugs may rise together. For example. Copaxone, a drug used to treat multiple sclerosis, debuted in 1996 for around 10 thousand dollars, similar in price to Beta Sain, a drug that came out three years earlier. Both drugs now cost about 60 thousand dollars per year, so if someone asks you can you really put a price on your health? The answer is yes.