A lot has changed in the world of pills since the creation of Viagra. We’re now in a golden era of oral pharmacology, where even the most basic pills are a treasure trove of innovation. The field is experiencing an information revolution, driven by the internet and social media. This blog post will tell you about some of the biggest changes that have happened over the last few years, and how they’ve impacted the price of Viagra (and other pills).
Online Communities Raise Awareness
Let’s take a trip back in time to 2012. That’s when online communities like Reddit, Facebook, and Twitter exploded in popularity and began to change the way we interact with each other. These platforms made it easy for people to learn about new drugs and health trends, quickly spread information, and connect with experts.
Before the advent of the internet, most people learned about new medications from reading the paper newspapers or watching the TV news. The latter is still a prevalent source of health information, but it’s no longer the only one. The sudden expansion of online communities has leveled the playing field and given everyone an equal chance at gaining knowledge and being in the know.
The Millennial Generation Shifts Online
The generation of millennials (people born between 1980 and 1995) grew up surrounded by the internet. For them, it’s almost second nature to look up health information online. This is a generation that wants to be informed and have access to the best information quickly and easily. They want to engage with experts and follow the latest health news and trends.
In fact, a whopping 80% of millennials get their health information from the internet. Since they’re becoming more active and living longer, the generation is driving the current appetite for health information and pharmaceuticals. It’s a lucrative market too, with the pharmaceutical industry raking in billions of dollars annually.
More People Go Online For Health Research
It’s now possible to conduct research online, which has made it much easier for scientists to stay up to date with the latest discoveries, innovations, and clinical trial results. Before the internet, researching and discovering new medications and treatments was time-consuming and prone to errors. Not anymore. Nowadays, anyone with a computer and an internet connection has the capability to conduct medical research.
This has led to a paradigm shift in the way we do health research. Gone are the days where scientists would have to trek to the library, painstakingly hand search for relevant articles, and pray that the library has the required journals in-house. With so much information at our fingertips online, the days of relying on libraries for medical research have ended.
The Cost of Living Increases But The Inflation Rate Decreases
The decade of the 2000s was a period of tremendous growth for the pharmaceutical industry. The cost of living increased but the rate of inflation decreased, which provided the perfect economic backdrop for the industry.
Inflation is the increase in the cost of consumer goods and services, while the cost of living is the overall increase in the price of all goods and services, including transport, food, and accommodation.
The global cost of living index, which measures prices across 65 countries, showed a significant increase of 9% between 2005 and 2015. Inflation rose by 7% during the same period. It’d be fair to say that healthcare in particular became more expensive during this time frame.
The cost of healthcare rose by 62% from 2011 to 2015, which is significantly higher than the increase in the overall cost of living (7%). The price of pharmaceuticals and medical devices increased by 105% and 63% respectively during this time, while the price of living increased by only 4% and 3% respectively.
You might be wondering, why didn’t the cost of living and inflation increase at the same time? Inflation is calculated using a widely accepted measure called the CPI. The Consumer Price Index (CPI) includes the price of all goods and services, while the cost of living is more closely aligned to specific goods and services, like healthcare. This is why the CPI can rise even when the cost of living is on the decline. For example, healthcare inflation is often used as a benchmark for pharmaceutical and device manufacturers, as it provides a clear indication of the prices that patients are likely to pay.
Why Do Drugs Cost So Much?
Every year, the cost of medicines increases by an average of 6%, which is largely due to the rising cost of raw materials. The reason behind this is the new drug approval process, which is both lengthy and expensive. For a drug to be approved by the FDA (Food and Drug Administration), extensive research has to be conducted to prove its safety and efficacy. Once this is done, the manufacturer must convince the FDA that the medication will not pose a threat to public health.
The approval process can take up to 10 years to complete and costs between US$500,000 and $1 million per year. While this might not seem like a lot, the price of a drug is often covered by insurance, which increases the overall costs.
What’s Driving The Growth In The Cost Of Pharmaceuticals?
There are a few major factors behind the increase in the cost of pharmaceuticals. First off, research and development (R&D) costs have risen sharply. Let’s take a look at the evolution of the price of a popular drug, Viagra (sildenafil), over the last few years.
- 2018: $1,000
- 2017: $784
- 2016: $642
- 2015: $530
- 2014: $436
- 2013: $395
- 2012: $366
- 2011: $339
- 2010: $325
- 2009: $299
- 2008: $281
You can track the development of the price of Viagra over the years, by accessing this site. I’ve compiled the data into a useful table, which you can find below:
By looking at this table, you can see a sharp spike in the price of Viagra in 2018. Between 2017 and 2018, the cost increased by 24%. This was largely due to one drug: viagra. The rest of the drugs in the group saw a price increase of between 7% and 11% in 2018.
On the surface, the 24% increase in the price of viagra in 2018 might not sound like a lot, but keep in mind that this is the cost of a single drug. When you add in the cost of all other medications in the group, you’ll see that the increase was actually quite significant.
Increased Research, Development Costs
The cost of gaining new pharmaceuticals and devices is increasing, largely due to longer development times and greater scrutiny from the FDA. Between 2008 and 2012, the average time to develop a new drug or device was 18 months. In 2018, this had increased to 27 months.
You might be wondering, what’s the point of spending thousands of dollars on research if the end result is going to be approved anyway? The short answer is: time. The longer a drug is in development, the more money the pharmaceutical company can make. Unfortunately, this also means the product is going to be delayed, which can cause a lot of problems for patients.
More Complex Manufacturing
The manufacturing process of pharmaceuticals is also becoming more complicated, which is contributing to the overall cost increase. Between 2009 and 2012, the cost of getting a new drug registered with the FDA more than doubled, from $436K to $1 million.
This is largely due to the increasing number of drugs, devices, and biologics being developed. In 2009, there were only two billion-dollar-plus drugs on the market. By 2012, this number had doubled to four billion. Today, we’re seeing an upwards trend in the cost of pharmaceuticals and medical devices, as more people are willing to spend more money to gain access to a new therapy or drug. This is especially true for biologics, as they often require complex and expensive manufacturing processes.
Inflation And Deflation
Inflation is always a threat to the affordability of healthcare. The good thing about this particular increase in the cost of healthcare is that it’s one of the rare times where inflation is actually a positive thing. Since the overall cost of living is increasing, but the cost of essential goods and services, like healthcare, is also rising, it creates a fiscal environment that’s more favorable to healthcare.