Essay On Drug Prices

The pharmaceutical industry is one of the most powerful and greedy industries in our country, with a goal to make as large a profit as possible, at the expense of the sick.

The cost of health care has been at the forefront of politics for years. It is one of the most talked about topics not just in political venues but also country wide. Every American has an opinion on how our economy can be fixed and they are passionate about health care reform. The price of insurance alone causes many Americans to not have coverage. For those that can afford coverage, the struggle to pay co pays is immensely crippling their bank accounts. Of these burdens on Americans today, the most frightening fact lies in the cost of prescription medications.

In 2014, the average cost for an individual rose to $5,615. For those that have an income over $200,000 have to pay a higher tax. This tax is called the Robin Hood redistribution and was set to begin in 2014 with the enactment of the Affordable Care Act. For the employers of companies, on average, they would have to pay around 30% for their employees to be covered with healthcare and insurance whereas in 2010, they only had to pay around 10%-20% of their healthcare and insurance. Currently, Americans have higher health insurance premiums, increased deductibles through their health plans, and the highest prescription drug costs our country has ever had. The costs in prescription drugs drastically rose between 2010 and 2014. Since 2010, the average cost for a patient to fill a prescription drug through commercial plans have risen by more than 25%. Drug companies put a higher cost on their drugs in 2014 as they saw the rise of those acquiring health insurance and healthcare. However, in states such as Kentucky and Arkansas, in 2014, people who skipped paying for their medication due to the cost being so high, dropped by 15% from roughly 43% to 28% due to Obamacare. Although, with Medicaid expanding, this puts more pressure on the middle-class population in the country as well as healthcare professionals as many physicians have to pay nearly half of what they earn to the

Under the existing federal Medicaid pharmacy benefit program, fee-for-service reimbursement rates for prescription drugs are based on the actual invoice cost of prescription drugs plus a reasonable professional dispensing fee. Any federal reforms to Medicaid which would allow states to set Medicaid pharmacy reimbursement rates below actual drug acquisition costs could seriously jeopardize Medicaid patient access to Medicaid drugs. Whether in a Medicaid managed care or fee-for-service setting, a Medicaid program that reimburses below actual drug costs raises a barrier that may limit or eliminate access points for patients to utilize their Medicaid drug benefits. Even with a cost-based drug reimbursement floor, Medicaid programs can fully avoid patient access barriers only through the addition of adequate dispensing fees that are more reflective of the cost to provide healthcare services in the

In 2010, the Affordable Care Act created a $250 rebate if the Medicare beneficiary was in the coverage gap. It also expanded coverage to the discounts given on brand name prescriptions. With reforms and improvement comes disadvantage to others. Beneficiaries and patients will be able to start saving more money, but it comes with a decline for the drug providers. According to Health Capital Consultants, “over ten years, closing the coverage gap may ultimately cost approximately $32 billion” and the pharmaceutical industry will be forced to take on most of this burden. These companies are paying for the flexibility they’re been given by MMA. They can “set their premiums, design their own formularies and are free to use cost management tools” and Medicare will reimburse plans for a “share of their drug costs.” (Guterman & Huynh ,

The pharmaceutical and biotech industry agreed to contribute billions of dollars to healthcare reform. Having agreed early in political negotiations to contribute any-where from an estimated $80 billion to $105 billion in fees, rebates, and discounts to help move the legislation forward (Nussbaum, 2010). By agreeing to support healthcare reform with their money and policies, they were able to avoid issues that had plaques their industries for years such as drug importation and the ability to negotiate drug prices for Medicare D. In return, the pharmaceuticals and biotech firms would agree to discount drugs purchased by Medicare beneficiaries, affected by the doughnut hole, of the Part D program by 50 percent (Spatz, 2010). Congress also proposed additional government subsidies to be added to the discounts that would further shrink the gap; beneficiaries will pay 25 percent copayment

Prescription drugs are one of the most important features of modern health care; when used appropriately they can prevent and cure disease, thereby extending and increasing quality of life (Morgan et al.). Since 2002 with the release of the Romanow Report there has been proposals to update the current health care model to integrate prescription drugs with medicare, but little progress has been achieved. To illustrate the magnitude of the problem, a breakdown of public and private contribution to drug coverage will be conducted, followed by an examination of how the current drug programs create health

Once the limit for Part D Medicare benefits has been reached, patients are now responsible for the full cost of the drugs. Needless to say, for most people who have Medicare Part D, the donut hole presents unfortunate financial challenges. Inclusively, the additional funding for these provisions also raise prices at a rate higher than inflation. “Such a price-hike penalty already applies to brand medicines, and proposals to extend it to generics are under review by the Health and Human Services (HHS) Inspector General” (Wechsler, 2015, para 2). This change will discourage pharmaceutical companies from entering into specific drug classes, and provide fewer choices that will increase the patient’s reliance on older, originator products and drive up costs (Wechsler, 2015, para

There are often expenses that are not planned for, especially when it comes to healthcare. Recently, there has been a spike in the cost of a commonly-used device to treat many severe allergic reactions: The EpiPen. The EpiPen is an epinephrine auto-injector that is used to treat anaphylactic shock. Anaphylactic shock is “a severe, potentially life-threatening allergic reaction that occurs within seconds or minutes of exposure to an allergen” (Mayo). A pack of two EpiPens can cost around six-hundred dollars, while it only costs around fifteen dollars to create one. (Mangan) Since Mylan NV, the maker of EpiPens, “acquired the rights to the drug in 2007, it’s raised the per-dose list price from about $50 a shot to $304... The EpiPen now generates about $1 billion a year for Mylan” (). In addition, in 2013, the U.S. government “passed a law that gave funding preferences for asthma treatment grants to states that maintained an emergency supply of EpiPens” (NYTimes). The distribution of the product is definitively limited to those willing and able to pay a copious sum for a drug that might save one’s life. Therefore, a solution to this limitation must be made in order to produce more adequate healthcare.The Epipen distribution system can be fixed in a variety of ways that benefit either the consumer or the company, but still result in an increase in the number of people who can access the medicine, which is important for many reasons. The best solution to this situation would

This is a serious long-term concern, and needs to be addressed. Some methods to ensure medications are lowered and kept at prices Americans can afford, is to create policies to demand transparency from pharmaceutical companies, allow generic drugs to be created, and remove the ban on Medicare permitting them from negotiating prices on medications.

"The pattern of large, biannual price increases for EpiPen began in 2009. In an earnings call that year, Bresch, Mylan’s chief executive, told investors that the company would be introducing a new version of EpiPen’s autoinjector device, one with patent protection that would make it more difficult for a generic competitor to enter.

PBMs have helped saved jobs and entire companies, and are projected to save Medicare part D $2 trillion dollars for seniors. However, there is little evidence to back this up as the same companies that have provided the savings costs are setting the price of each and every drug. Further, the prices of drugs, especially generics

The epipen, which is essential to people who suffer from extreme allergic reactions, has risen to about 600 dollars for a two pack, up from 100 when Mylan pharmaceuticals got hold of them in 2007. The CEO of Mylan Pharmaceuticals, Heather Bresch, tried defending the company by blaming the rise in prices on a broken Healthcare system. Epinephrine costs less than one dollar per milliliter. A single epipen has less than a third of that in it. The reason kids need epipens is because epinephrine must be given quickly and in the right dosage. Because the epipen basically has a monopoly and the product and insurance covers a large portion of the cost, Mylan can raise prices with little resistance. The company has recently announced that it will be

Whether a patient goes to a doctor visit for a chronic condition or a short term illness, he or she will most likely leave the appointment with a prescription. Those Americans, that do have insurance, may face issues such as the prescribed medicine may not be covered, or the copayment may be more that they can afford. Citizens that are not insured may face a similar issue and the medication may not fit in his or her budget. While many medications are available in generic form, there a still a few that are not. Because of the high cost of some medications, many Americans go without medicinal treatment that could be crucial to one’s life. “According to the Commonwealth Fund, 50 million Americans between the ages of 19 and 64 skipped filling a prescription due to cost in 2012” (Graczyk, 2014). This problem has to be solved soon. Again, revenue from taxation could be the primary source for funding this movement that would provide affordable medications at the same price for all American citizens. Residents of America already pay a number of different taxes, many of which some Americans do not benefit from, such as Medicaid and Medicare. If this country can establish a universal health care system that includes coverage at not only a hospital or physician’s office, but also a pharmacy, Medicaid, Medicare, private insurance, or no insurance can all be part

In a Wall Street Journal article, Jeanne Whalen (2015) notes, “Drug prices in the U.S. are shrouded in mystery, obscured by confidential rebates, multiple middlemen and the strict guarding of trade secrets.” In other words, the exact cost to research, develop and bring a specific new drug to market is not made public by U.S. drug companies, and neither is the profit earned on a particular drug. The fact that there are so many players in the supply chain, and these players often have confidential contracts in place with the drug companies, makes it difficult to assess whether or not a drug’s price fairly represents it value. Although terms such as “fair” and “value” may be argued as meaning different things to different people, the growing uproar from patients, federal and state governments, physicians, and insurers indicates that the pricing practices of U.S. drug manufacturers have reached a tipping point, with some drug prices being termed “price gouging.” Because of the secrecy and complexity of our free-market based drug pricing system in the U.S., there are no real protections to ensure that price gouging of patients is mitigated. In contrast, many European nations, which have national health insurance programs funded by the taxpayers and charge little to nothing for prescription drugs, have drug coverage systems which include controls that safeguard the system from price gouging. The call for “rational drug pricing” is a concept that is gaining momentum in the U.S.