Why drugs cost so much in US

ELI Lilly charges more than US$13,000 a month for Cyramza, the newest drug to treat stomach cancer. The latest medicine for lung cancer, Novartis's Zykadia, costs almost US$14,000 a month. Amgen's Blincyto, for leukaemia, will cost US$64,000 a month.

Why? Drug manufacturers blame high prices on the complexity of biology, government regulations and shareholder expectations for high profit margins. In other words, they say, they are hamstrung. But there's a simpler explanation.

Companies are taking advantage of a mix of laws that force insurers to include essentially all e…