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How much does an amoxicillin prescription cost ?", I'd bet on the total price of $70. So how did a $70 drug cost $7 billion? The question that we need to be asking is: What's amoxicillin clavulanic acid cost the cost of making a drug? The answer may surprise you. I'm sure you'll find a few people reading this trying to justify their own drug costs on the basis of "how much they can buy at Wal-Mart". In actuality, that $70 is really the net cost of making drug. You might have been confused by that statement — I certainly was. If so, I've got one word for you: patents. I've spent my entire life studying patent law, and this is really some of the most important concepts I've learned. It's often difficult to fully understand the patent laws, and I've struggled with them myself the last few years. I'm pretty sure I'll continue to struggle with it for the rest of my life. It's one those things that's just so intuitively obvious when you realize it, but also difficult for most people to understand all at once. I've done my best to provide a simple explanation below and in an upcoming post on how patents actually affect drug prices. So let me explain. First of all, let's look at the most expensive prescription drugs made in the US 2014, measured by sales price: Drug Price Rank Sales Cost 1 Amoxicillin 200g for $13.60 2 Estradiol 25mg $11.90 3 Humira 100mg for $16.90 4 Pradaxa $10.25 5 Buprenorphine 50mg for $10.80 6 Lyrica (cobalt) 25mg for $15.90 7 Abilify 30mg $10.90 8 Viagra 100ug for $36.40 9 Levophed 100mg $46.60 10 Ceftriaxone 1,000mg for $12.45 That's right. Amoxicillin was the most expensive drug sold in the US last year, and it was only the fourth most-expensive drug overall. What's fascinating about that chart is Amoxicillin was only one of the top 20 most-expensive drugs made that year (the top 20 are drugs in development for at least another five years, so we're not really comparing any prices since they're already in production). So while Amoxicillin only cost about $13.60 in 2014, the total cost for making Amoxicillin itself was $7,040,539 that year. makes Amoxicillin the 3rd least-expensive drug in world this next year. The Amoxicillin prices are pretty misleading though. Remember I said it was in development? And I said it was a year-and-a-half out from final commercial launch? That meant in 2013 and 2014, the company behind Amoxicillin had to pay for the research and development in a year. They also received royalty and patent costs, but those amounts are not included in the sales price this chart. This brings us to the second part of story. Since patents usually last for 20 years after being granted, the total cost for Amoxicillin patent alone would have been about $6 billion per year in royalties. That doesn't even include another $600 million in government subsidies that makes Amoxicillin a free drug. They'd still have had to pay for the research and development in a year to avoid these government benefits (just not without the tax incentive that applies to any company developing a drug in the US). So $6 billion in royalties would really only be about $5 billion for the 20 years, which is much less than $3.5 billion (the sales price), but still way more than most people realize (or know) about drug patent costs. (This doesn't even get into the fact that if a drug isn't approved by the FDA, it's basically a lost opportunity. The cost of getting a drug approved by the FDA is quite high for pharmaceutical companies — it's one of the big reasons why drug research in the US is far behind other countries — so drug companies don't just give away these free drugs — but instead are forced to pay exorbitant, high-interest drug development programs.) Let's go back to when I was talking about how the drug companies get money from generic manufacturers. Generic Drug Manufacturing Costs As we'll see in a future post about generic drugs, drug companies get a substantial portion (often about 80%) of their income from selling non-profitable medications. The rest comes from selling profitable drugs. However, the generic drug manufacturing amoxicillin clavulanate cost process is relatively inefficient. It takes a lot of effort and time to make a drug. Generic drug manufacturers spend a lot of time and effort to try make the product as good possible and to cut down.



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