Big profit margins provide the primary explanation. Pharmaceuticals don t require giant mark-ups. Not surprisingly, corporations pay big money to protect their profits. In addition, regulatory changes allow more advertising now than in the past. The billions spent on ads only add to the costs of treatment.
Reforms are possible.
Changing Medicare coverage to include prescription drugs would protect the elderly while allowing the government to bargain for lower prices. Preventing firms from charging more to people who don t buy in large volumes could bring down costs for others. Field Guide page 7.8, which follows pharmaceutical profits from 1961 to 1999. Field Guide page 7.5, with a chart of medical care costs over time. Center for Responsive Politics.