The Daraprim and the Pharmaceutical Pricing Paradox: A Broken System?

Abstract

In a recent study by the American Association of Retired Persons (AARP), the average prices for brand-name prescription drugs were found to have increased by an average of 13 percent in 2013, compared to the inflation rate the year of just 1.5 percent. The Daraprim and Cycloserine cases, while extreme illustrations, depict a broader trend of increasing U.S. drug and health care costs to patients. The two manufacturers' pricing decisions illustrate a longstanding tension in the pharmaceutical industry between the need for firms to recoup the high costs associated with bringing drugs to market and keeping drugs affordable for consumers.