R&D cost: The research and development of drugs requires a lot of time, manpower and money, while the success rate of R&D is relatively low. Therefore, once a new drug is successfully developed, pharmaceutical companies need to recover the research and development costs through high prices.
Production cost: the production of drugs needs to go through many links, including raw material procurement, production, packaging, quality inspection and so on. And every link needs to consume funds. In addition, some drugs may need special technology and equipment to produce, so the production cost will be higher.
Taxes and profits: drugs also need to pay various taxes and fees in the sales process, such as value-added tax and income tax. At the same time, drug sellers and manufacturers also need to make a certain profit.
Market supply and demand: some drugs may have high prices because of large demand, and some drugs may have low prices because of oversupply.
Therefore, the price of drugs is not entirely determined by the cost of drugs, but also influenced by many factors such as market demand and policy environment. Of course, in countries with perfect medical systems, the government will control the inflated drug prices by means of drug price control, so as to reduce the burden of patients' drug costs.