Why? Well, the drug companies and the government say we have to, so the companies can keep developing new drugs.
But that's no consolation to the tens of millions of elderly and uninsured who can't afford to pay for the drugs they need. Correspondent Bob Simon talks Dr. Peter Rost, a critic of the way drugs are priced and sold in the United States, who also happens to be a vice president of marketing for the pharmaceutical giant Pfizer.
Rost has taken the risky and possibly career-shattering step of opposing his own employer, and the rest of the drug industry, by saying America can have cheaper drugs if it set up a system like the one in Europe.
Rost says that on average, drugs in Europe are about half the price of those in the United States.
"You have certain drugs that cost 10 times more in the U.S.," says Rost. "We're talking about exactly the same drug, made in the same plant, by the same manufacturer."
And Rost says these are drugs that are also made in the same plant. "It is stunning," he says. "Once people become aware of it, it is stunning. And obviously, they get upset."
One example: the commonly prescribed cholesterol-lowering drug Lipitor, made by Pfizer, the company he works for. In the United States, the full retail price is about $76 dollars for a month's supply. The exact same drug costs $55 dollars in Canada and just $43 dollars in Italy.
It's the high price of drugs in the United States that has outraged Rost and led him to put his career on the line to try to help America's uninsured find a way to get cheaper drugs. He's a physician and a businessman who's worked in the drug industry for 20 years – both in America and Europe – marketing and pricing prescription drugs.
"We're the wealthiest nation on earth, yet we have between 49 and 67 million Americans without any kind of insurance for drugs," says Rost. "And they pay full price, cash, and they can't always afford drugs."
He says that's because drug pricing is not a free market in the United States, the way it is with most other industries. Brand-name drugs have patents, which means no other drug company can make the same drug until the patent runs out in 20 years.
Remember: Rost is an executive for Pfizer, but he's not speaking for the drug company.
"The industry likes to talk about the U.S. as a free market. A free market in this case simply means that the drug industry is free to set whatever price they want. And mostly patients and others simply have to pay. There isn't a choice," says Rost. "In a situation like that, you can obviously raise your prices as much as you can get away with."
Rost makes a comparison to a car company that can charge whatever it wants for a car: "What's going to happen is if they double their price on cars? Imagine what's going to happen to their sales? A new car is not a necessity, but where you're sick, to get treatment, to get well, and to survive, that is a necessity."
But why can't you just buy a generic? "For some areas, that works fine," says Rost. "For many areas, there aren't generics available."