probably because there's so much money tied up in research and testing. that part is expensive because, despite what venom tells you, the government doesn't want drugs to hit the market that promise to cure the flu but actually cure you of the ability to walk. these companies have to recoup their losses somehow
the real crime is all of the money spent on advertising and bonuses for execs
Despite pharma-sponsored studies suggesting that a new drug costs close to 1.2 billion dollars, in truth, the average drug approved by the FDA has had only $71 million in R&D funding. But then, over 90% of new drugs have no new ingredients except for those in drugs with patents set to expire.
Look at the Bayh-Dole act, and the Hatch Waxman act. Under the provisions in Baye-Dole, the government actually pays big pharma over $20 billion a year in grants for R&D.
So in summary:
1) we handpick the biggest companies for R&D
2) We fund this R&D with public money and don't expect anything back on our investment
3) We give them exclusivity to market their products competition free for a time period. Then when the time period expires, they just change the drug slightly and submit it for re-approval.
4) we wonder why free market forces don't work in the pharmaceutical industry in regulating profit.
Sweetheart deal if I ever heard one.