The largest driver of high drug costs in the U.S. may be government practices that allow drug companies to develop large monopolies on their products, according to a study featured in the Journal of American Medical Association.
Researchers at Harvard Medical School in Boston examined medical and health policy literature from January 2005 to July 2016 that discussed the source, justification and consequences of drug prices in the U.S.
The study found that the high cost of prescription drugs is largely caused by drug monopolies and restrictions on price negotiations, with market exclusivity representing the main driving factor. Market exclusivity gives drug companies exclusive marketing rights to newly-approved drugs for five to seven years before generic competition can enter the market.
Researchers suggested several methods to help lower drug prices, including enforcing stricter requirements for exclusivity rights, allowing for price negotiations by large payers and boosting generic drug availability to enhance competition.
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