This is a common problem in healthcare and I think it comes down to these issues: 1. Pharmaceuticals have natural monopolies on these drugs (due to regulation,

This is a common problem in healthcare and I think it comes down to these issues: 1. Pharmaceuticals have natural monopolies on these drugs (due to regulation, market power, etc.). 2. The public and end consumers are largely unaware when these monopolies are exercising their power to increase costs. This is because there is no one price, you don't actually pay the actual price (if you're on insurance), and it's difficult to actually realize what the price of a drug is. 3. Many insurance companies don't have strong incentives to combat price increases. [1] As these prices increase, consumers become more and more reliant on insurance. [2] Insurance companies have targets for what percent of their expenses they are allowed to devote to administrative costs (buildings, salaries. etc). As the cost of drugs rises, they can increase salaries etc. while keeping the percent devoted to administrative costs constant. [3] Insurance companies are also largely monopolies. End consumers usually take whatever their employer gives them and in most states there are only a few providers. As such, they don't have much pressure to have more competitive plans. 4. Pharmaceuticals companies respond to demands to increase shareholder value by increasing drug prices. This is exactly what we'd expect them to do as per their incentives. ------ The solution to me is the following: 1. Allow the safe import of drugs from overseas to create a more competitive market (the US has strong regulations against importing drugs mainly due to safety concerns). See this(https://www.pbs.org/newshour/health/u-s-make-easier-import-prescription-drugs https://www.pbs.org/newshour/health/u-s-make-easier-import-p...). 2. Regulate pharmaceuticals and insurance companies as the monopolies they are, or dramatically lower the barriers to entry in the space. 3. Reduce the power of pharmaceutical companies to lobby and reinforce the regulations that help them preserve their monopolies. They have every incentive to lobby for protection and it's no surprise that healthcare industry has by far the biggest lobbying spend in the US - nearly double that of Oil & Gas (https://www.opensecrets.org/lobby/top.php?indexType=i&showYear=a https://www.opensecrets.org/lobby/top.php?indexType=i&showYe...). ------ The book American Sickness(https://www.amazon.com/dp/B01IOHQ9LO/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1 https://www.amazon.com/dp/B01IOHQ9LO/ref=dp-kindle-redirect?...) discusses just how far we are from any type of perfect competition in this industry and the resulting effects on consumers. I really enjoyed it and it's a great book if you're interested in the space.