Drug companies justify the high prices they charge by arguing that their research and development (R&D) costs are huge. On average, only three in 10 drugs launched are profitable, with one of those going on to be a blockbuster with $1bn-plus revenues a year. Many more do not even make it to market. But drug companies spend far more on marketing drugs, in some cases twice as much, than on developing them. and besides, profit margins take into account R&D costs.
The industry also argues that the wider value of the drug needs to be considered. Drugs do save money over the longer term, take hepatitis C for example, a virus that killed people and used to require a liver transplant. It's difficult to find accurate figures but at around £35,000 [to £70,000] for a 12-week course, 90% of people are cured, will never need surgery or care and can continue to support their families.
The amount of money saved is huge. That's true, but just because you can charge a high price for something does not necessarily mean you should, especially when it comes to health. Shareholders, who big pharma companies ultimately have to answer to, would have little time for such an argument.