Influence And Dominance Of Phrma

In general, healthcare spending grew 1.2 percent faster than the overall nation’s economy. Some of the reasons for the increase in health care spending are the fast growth of private insurance, Medicaid expansion, and the rapid increase of prescription drugs cost. In order to understand how each of the mentioned reasons impact the overall healthcare expenditure, it’s important to discuss one-by-one; however, this paper focuses only on financial issues in prescription drugs (Martin, Hartman, Benson, & Catlin, 2015).

“The biggest problem with health care is not with insurance or politics. It is that we are measuring the wrong things the wrong way” (Kaplan & Porter, 2011, p. 46). Total healthcare expenditures and expenditures as a percentage of GDP have been considerably higher in the U.S. Hospital care, physician and clinical services, and drug prescription expenditures have been the principal components contributing to growth in healthcare expenditures in the U.S. compared to other countries. The study also analyses and compares the growth of healthcare costs. Three different perspectives on the health care “cost crisis” are understanding the value of health care, most health care costs are fixed and healthcare cost covered by health insurance program. In this paper share ideas to help solve the cost crisis in healthcare.

1 Kaiser Family Foundation Report on the Uninsured. Available at http://www.kff.org/uninsured/7451.cfm. 2 Danzon, P., et al. “The Impact of Price Regulation on the Launch Delay of New Drugs.” Health Economics, 2005; 14(3): 269-292. Available at http://hc.wharton.upenn.edu/danzon/html/Journal_Articles.htm. 3 The Boston Consulting Group. “Ensuring Cost Effective Access to Innovative Pharmaceuticals – Do Market Interventions Work?” April, 1999. Available at http://www.bcg.com/impact_expertise/publications/files/Ensuring_Cost_Effective_Access_Innovative_Pharmaceuticals_Apr1999.pdf 4 Thorpe, K. et al. “Differences in Disease Prevalence as a Source of the U.S.–European Health Care Spending Gap.” Health Affairs (Web Exclusive) Oct. 2, 2007. Available at www.healthaffairs.org.

I argue that advances in technology, nondiscretionary costs, and lack of competition in the medical equipment, pharmaceutical retail and insurance markets are the main reasons behind the high cost of health care. In this paper, I will use and analyze various resources like America’s Health Care Crisis: Who’s Responsible by Nancy Levitin, Health Care USA: Understanding its Organization and Delivery by Harry A. Sultz and Kristina M. Young, and Epidemic of Care by George J. Isham and George C. Halvorson to prove and support my argument, which is that advances in technology, nondiscretionary costs, and lack of competition in the medical equipment retail market, are the specific factors behind the rising cost of health care. I will also propose different strategies that will help achieve lowering the price of healthcare. Many people across the nation are unable to seek medical attention due to insufficient funds. If people do not receive health care, communicable diseases may spread more often on a large scale and life-threatening diseases may go undiagnosed leading to an increase in death rates. Making health care affordable can be achieved by making advanced technology less expensive, decreasing the amount of nondiscretionary costs, and increasing the competition in the medical equipment, pharmaceutical retail and insurance markets.

As companies continue to develop new, innovative products, they gain the advantage that comes from a lack of substitutes that insurers can present. This encourages large pharmaceutical companies to spend money on lobbying to greater influence large decisions made in the executive and legislative branches and maintain their monopolies. In 2014, five major drug companies reported to have increased expenses allotted for lobbying by one million dollars (NCPSSM, 2014). In the long run, this gives large corporations more favorability in the legislation that is enacted on matters concerning Medicare Part D and other drug disputes, creating an unequal advantage. This is most clearly represented in the figure below that outlines how much drug lobbyists have given in terms of donations to politicians. This in turn misrepresents the population that is affected by the decisions made by the government and leaves consumers to deal with the

Health care costs are extraordinarily high and keep getting higher. Individuals in the US that do not have access to medical services are running as high as 43.4 million and This number has grown by over a million in each of the last three years. (AFSCME, n.d.). The rise of prescription drug

I believe that one factor that vastly impacts the cost of health care is the monopolization of health care systems and hospitals as well as provider shortages. When considering the economic principle of producers and consumers, you to

One of the biggest industries in the United States is healthcare industry, which accounts for over 17.5 percent of the Gross Domestic Product (GDP) of the country. This big representation of the nation’s economic activities impacts the overall economy. In other ways, it’s also impacted by the general economy. While the health care industry continues to grow, transformational changes also continue to enforce change in its organizational structure. Change in organizational structure enables health care providers to make arrangement for the change. In this case, the overall health care providers’ advance in new medical technology (to provide the best quality services), financial system, and the entire health care service structure, rules, and regulations are changed. Hence, a health care industry is fronting a noteworthy pressure to reduce health care cost, to prepare for an influential change in how health care is provided, financed and consumed while delivering the quality care (Hicks & Jacobs, 2014, pp. 385-402).

Another important player that has helped propagate this myth of decreasing growth in health care costs would result in the decrease in access to and quality of health care services is the AMA. According to Laugesen, “House of Medicine’s influence over fees has successfully maintained many historical pricing differences” this implies that an outside committee was influencing the costs of health care (201).

The market sector we have chosen to do our financial analysis is Health Care. The Health Care market sector is then further divided into six main sub-sectors, for which our three companies, Johnson & Johnson (JNJ), Pfizer (PFE), and AstraZeneca (AZN), are categorized in the Pharmaceutical sub-sector. Furthermore, Yahoo Finance’s industry center labels these three companies as being Drug Manufacturers-Major. This industry is unique in that it has both defensive and cyclical aspects due to the overall need for medical treatment of diseases and the growth of innovative products and treatments. This market sector is also known for its heavy regulation and sensitivity to the political climate. One such example of this is the Affordable Care Act, commonly known as “Obamacare”. Other important characteristics of this market sector are its heavy Research and Development spending, extended times for products to reach the market and

Researchers at Center for Medicare and Medicaid Services found advancements in technology as the main reason for rising healthcare cost. On reason for this is research, millions and billions of dollars is spent every year to develop new technology and find cure to many diseases. Many pharmaceutical companies have come under hammer for high drug prices and huge spending on research. According to researchers from Tufts University, pharmaceutical drug costs increased from 5.5-8.5% of total healthcare spending during the 1990s (CITE). About $111 billion dollars was spent on research in the United States, with pharmaceutical and biotechnology industries topping the table. There’s no denying the fact that research helps

In the US, the drug pricing is a highly discussed issue as there is a substantial skyrocketing increase in the prices of the branded and the generic drugs. The panelists at the Forum, Harvard Medical School of Public Health addressed the extraordinarily high drug pricing issue in the US and it’s public health implications.

In the United States, consumers are now spending upwards of 200 billion dollars a year on pharmaceutical drugs, and this number is slated to increase by 12-15% each year in the coming decade (Hoey 1). Many life-saving and essential drugs for consumers tend to get quite expensive depending upon the type of treatment prescribed to that patient. Depending upon market variables, including mergers, and buyouts, drug prices will have a greater chance of going up in price due to less competition in these cases. Most generic drugs that are manufactured have to delay release of these live-saving drugs until the much larger drug companies are able to make a substantial profit first. The real issue for many consumers is that the ones paying for premium health insurance plans will feel the effects of these price increases first as prices rise. Most elderly folk, or anyone covered under Medicare and Medicaid have some semblance of price protection from several federal acts of law to help maintain reasonable price points. However, even with regulations in place, some companies and drug entities are able to delay drug approvals with the FDA shorting stocks and betting on the loss of other smaller companies. These practices endanger the consumers at all levels as drug companies increase the cost of life-saving pharmaceutical drugs causing extreme hardships for patients, the delay of drug releases affecting consumer care, the potential for paying

This shows that insurance companies can influence the prices placed by pharmaceutical companies. If all insurance companies unified to stop purchasing overly priced medications and shopped around to cover medications from companies with the lowest price, they could create a drive to pressure pharmaceutical companies to have competing lower prices. They could also demand transparency in the cost of medications, helping bring awareness to the American consumer.

As one leader in the free world more money is spent on health care in this country than any other industrialized nation. The major expense to the health care system is managing chronic diseases and illnesses. Each year trillions of dollars are spent on health care, which continues to be an economic burden in this country. The impact on the economy can be attributed to increasing health care costs, declining health of Americans, and decrease productivity among workers (Preventive Medicine, 2009). The goal of this paper is to discuss the various economic tools and concepts such as supply and demand curves and price elasticity, and marginal analysis in the managed health industry.