To set the price of a drug, is the company required to go through any application process?

Question

To set the price of a drug, is the company required to go through any application process?

Answer 1

The cost of a drug that is not marketed in a generic form is usually affected most by the cost of developing and producing the drug (did it have to go through extensive and expensive testing?), the importance to the patient (is it a cure for a horrible condition?), and the commonness of the condition treated (is it something that everyone needs, or one out of every million people?).  

When a medication is released to generic production, it will generally cost less because there are more companies selling it and these new companies did not have to pay to develop it.

Answer 2

In the US, there is no set price. It's a free market, except that at the end of the trail from manufacturer to wholesaler to the corner drug store is the final consumer, who doesn't care what the drug costs, thereby leaving it to his insurer to negotiate; or the final consumer without insurance, who is totally screwed. In either case, there's nothing approaching a normal economic system for the little guy, and it's pretty strange for the rest. That's why drug companies have profit margins greater than any other industry.