had not filled a prescription in the past 12 months due to cost, and 18 percent reported they "cut pills in half or skipped doses" according to a kaiser family foundation survey. a 2015 survey by the national center for health statistics found that 8% of americans did not take their medications as prescribed to save money. similar studies, done ten years prior, found numbers very similar to the 2015 numbers from the kasier family foundation survey. in 2007, it was estimated that 23.1% of americans (51 million) had not adhered to their prescription instructions due to the cost of prescription drugs. this is compared to only 8% of canadians who skipped doses or failed to fill a prescription in the same year because of the cost of prescription medications. the number of americans who reported cost-related non-adherence to their prescriptions was more than double the number of canadians. the factors that contributed to whether or not a person was more likely to not follow their prescribed medication instructions were age, the number of checkups with a physician, ongoing health problems, income, and insurance coverage. for example, adults between the ages of 18-35 were more likely to skip doses or fail to fill a prescription than those 75 years of age or older. those with fewer visits to a physician and those with chronic illnesses or disabilities were also more likely to report noncompliance. the reason for those with ongoing illness or disabilities to skip doses is likely due to the increased complexity and the higher prices of the drugs needed. income and insurance coverage were also major factors determining whether or not a patient would take their medication in the correct doses for the correct duration of time. those who lacked insurance coverage or were in low-income brackets had very high rates of non-compliance with their medication, even though the united states has drug coverage policies for those with low incomes. those whose healthcare spending is more than 10% of their income and causes a financial burden to the patient, are considered uninsured, whether they actually have health insurance or not. one way to examine the potential impact of high drug prices on health outcomes is to look at the effects of having prescription drug insurance and subsequent hospitalizations. studies have linked obtaining prescription insurance plans to fewer hospitalizations and lower healthcare costs. for example, for medicare beneficiaries between 2002 and 2010, obtaining prescription drug insurance through medicare part d was associated with an 8% decrease in the number of hospital admissions, a 7% decrease in medicare expenditures, and a 12% decrease in total resource use. prescriptions from other countries main article: consumer import of prescription drugs the washington post wrote in 2003 that "u.s. customs estimated 10 million u.s. citizens brought in medications at land borders each year. an additional 2 million packages of pharmaceuticals arrive annually by international mail from thailand, india, south africa and other points". prescription drugs also entered the country in large quantities through canada because of the price differential of prescription drugs in the two countries. in 2004, it was estimated that americans purchased more than $1 billion in us dollars in brand-name drugs per year from canadian pharmacies to save money. the united states has some of the highest prices for specialty drugs compared to other developed countries. within the year of 2014, the cost of prescriptions had increased by at least 11.4% and 58% within the last eight years. the average cost for a month supply of brand-name drugs can run up to a couple of hundred us dollars, whereas in canada and great britain the same medication could cost up to $40 us dollars. in most cases, patients pay less for more. in some cases, u.s. insurance companies will pay consumers of high-cost drugs to personally travel to mexico to buy the same drugs at a much lower cost there. reasons for high prices variability and non-transparency the price of a pharmaceutical drug can depend on many factors: list price, wholesale price, average wholesale price (pharmaceuticals), rebates, supplemental rebates, markups from hospitals, markups for physicians, drug price for inpatients versus outpatients, formulary (pharmacy) tiers, mail order price, biosimilar prices, "patent expirations, compounds, samples, and many other ways that end up obscuring the reality of the price paid, who pays it, and how all of it influences treatment decisions." market exclusivity in a market without price controls, competition is key to driving the price of drug products down. however, legal protection in the form of patents results in a government-approved monopoly on the sale of certain drugs. typically, patents allow for market exclusivity for a maximum period of 20 years after patent approval. however, given that fda approval of a drug can take anywhere from 10 to 12 years, pharmaceutical companies can be granted a patent extension that is valid for a maximum of 14 years after fda approval of the drug. but even as the patent term nears expiration, pharmaceutical manufacturers employ several strategies to delay the entry of generic drugs to market. this could include by obtaining additional patents on other aspects of a drug, such as "its coating, salt moiety, formulation, and method of administration". an example of this strategy is the company astrazeneca plc ("astrazeneca") obtaining a patent on the enantiomer of omeprazole (prilosec), a heartburn medication. the patent was obtained without significant evidence of the enantiomer's improved efficacy. as a result, astrazeneca was able to sell its rebranded product esomeprazole (nexium) at a 600% markup. pharmaceutical companies have also employed the "pay-to-delay" strategy in which they enter into reverse payment agreements with generic companies to delay the generic drug's manufacturer. this was the case in 2008, when an agreement between astrazeneca and ranbaxy laboratories ltd. ("ranbaxy") was reached to delay ranbaxy's launch of a generic version of astrazeneca's patented heartburn drug nexium until 2014. drug companies have also increased the pricing of the drugs during this period of market exclusivity. one study found that oral anticancer drugs introduced in 2014 were six times more expensive at launch, when adjusted for inflation, than drugs introduced in 2010. once these new drugs are introduced during this period of market exclusivity, these manufactures use patent protection and other exclusivity programs to continue to raise the price of the drug from year to year even though there are no significant improvements to the drug. between 2014 and 2015 alone over 260 brand name prescription drugs increased in price by an average of 15.5 percent which is 130 times the rate of general inflation. this system creates a natural monopoly for the drug companies meaning that they can drive the price up without facing any punishment from the federal government. generic drugs typically lower the prices of these brand name drugs as they become direct competitors, however, over 500 drugs have only one marketed generic drug. this is simply not enough competition to drive the price down. the producers of the brand-name drugs have also been known to block the would be producers of the generic drugs from getting the drug samples they would need to be able to conduct bioequivalence studies, which are key to developing new generic drugs. there has also been a drastic increase in the amount of mergers and acquisitions among manufacturers, this leads to much smaller and less competitive markets. for instance, valeant pharmaceuticals bought over 100 different companies between 2008 and 2015. this market practice has continued to gain in popularity over the last few decades and remains quite a large issue. drug company profits a kaiser family foundation survey from june 2015 found the public citing "drug company profits" as the number one reason for the high cost of prescription drugs (picked by 77%), followed by the cost of medical research (64%), the cost of marketing and advertising (54%), and the cost of lawsuits against pharmaceutical companies (49%)." cbs moneywatch reports that in half of the 16 publicly held drugs companies in its study, profits exceeded r&d cost while in all but one of the companies, "corporate overhead" (which includes sales, administrative, and marketing) exceeded profits. as of 2015, several pharmaceutical companies had developed a new business strategy "of dominating noncompetitive markets for older drugs and then increasing the price substantially". in 2019 alone the price of over 3,400 drugs increased. for instance, allergan raised prices on 51 drugs, just more than half its total medications. some medications that allergan manufactures saw a 9.5 percent jump in cost, while others saw a 4.9 percent increase in cost. this helped allergan make a profit of over $15 million in 2018 alone. this trend is seen all across the healthcare industry, as the price of drugs increase so do the profits of the largest drug companies. researchers in jama found that between 2000 and 2018, 35 of the largest drug companies in the united states received a combined revenue of $11.5 trillion with a gross profit of $8.6 trillion. the key findings of this study relate to the median net income margin which is the percentage of revenue after all the companies expenses have been deducted. the median net income margin for the 35 drug companies was larger than that of the 357 non-pharmaceutical companies in the s&p 500 with the 35 companies having a 13.7 percent median net income margin while the s&p 500 had a 7.7 percent median net income margin. the lead author professor fred ledley, who is the director of the center for integration of science and industry at bentley university, stated that "the pharmaceutical companies' profits are really indistinguishable, statistically, from those of technology companies." one of the following programs is the 340b pricing program that allows hospitals and pharmacists to buy drugs at 30-50% off the retail prices. per hrsa's 340b drug pricing program, drug manufacturers are required to give certain organizations discounted drugs given these organizations fit the eligibility criteria for discounts. a big problem with 340b or similar programs is that pharmacies and hospitals can choose to bill for the discounted drugs at full price, defeating the purpose of the program to control drug prices and maintain affordability for low-income patients. orphan drugs drug companies can price new medicines, particularly orphan drugs, i.e. drugs that treat rare diseases, defined in the united states as those affecting fewer than 200,000 patients, at a cost that no individual person could pay, because an insurance company or the government are payors. congress passed the orphan drug act (oda) in 1983 to incentivize pharmaceutical companies to research rare disease states like acquired hemophilia a and glioblastomas. prior to the oda, the fda approved 34 orphan drugs. after the passage of the oda, the fda approved upwards of 500 orphan drugs in the decade to follow; successfully achieving the goal of increasing fda approved orphan drugs. an orphan drug may cost as much as $400,000 annually. monopolizing orphan drugs has proven to be a very profitable strategy for drug companies; rare diseases have few patients so heavy investment into marketing is not needed and patients rarely have other options. furthermore, a majority of orphan drugs (93%) are covered by insurance payers. in the face of continued criticism, drug company executives defend this practice by noting that high cost allows the company to produce the drug for the very few patients who need it, and that most patients with very rare disorders rarely require any treatment at all. targeting orphan drugs may sometimes fail. for example, glybera was a $1 million injection used to treat a rare metabolic deficiency, but was removed from the market due to lack of demand. however, there are many examples of orphan drug targeting proving to be a very profitable model for pharmaceutical companies. for example, alexion pharmaceutical, inc. released soliris in 2007 with an indication for a rare blood disorder. treatment with soliris costs roughly $410,000 per year, and has led to $2.8 billion in total sales in 2016, even with a patient base of only 9,000 people. fda backlog in generic drug application review the national debate over the rising cost of prescription medicines drew attention to the huge backlog of generic drug applications at the us food and drug administration (fda). usually, when enough generic drug products are introduced to the market, the cost