In the U.K the main (I should say the only) consumer (on behalf of the public) is the National Health Service (NHS). The price the companies charge is agreed with the NHS on very very favourable terms for the pharmaceutical companies. In short for a new product the price is set based on how much it has cost the company to bring the product to the market and acceptable profit on the investment to produce  the product. To understand this consider a company X is looking to introduce a drug A for say asthma which has taken the company 12 years to bring market since first applying for a patent. Now they have 8 years left on the patent to recoupe the investment and make a substantial profit before the patent expires. The price charged to the NHS thus is significantly higher. Take for example a drug for breast cancer marketed by one of the lagest pharmaceutical company is £87.00 for 28 tablets. The same product manufactured by the same company is available to the consumer in India for Rs 120.00 for 84 tablets. This amounts to a price difference of £86.50 for a months supply of medication. I am sure a number of readers will argue that the companies are making essential medications affordable to less well off countries. This is not the case as in these areas people rely heavily on traditional medicines, the demise of which is the main aim of the drug giants.