Major Drug Companies Taking Hefty Price Increases Essay

Abramowitz, P. W. (2017). The ongoing threat of rising drug prices: ASHP's work goes on.

In 2015, the pharmaceutical industry spent over 27 billion dollars on advertising. The two greatest components of this effort were promotional advertising and free medication sampling, which the pharmaceuticals invested 15.5 and 5.7 billion dollars respectively (“Persuading the Prescribers”). Promotional advertising involves direct contact with health professionals, the most common being extravagant lunch conferences held for physicians and their staff. On the other hand, sampling involves distributing free sample of medications to physicians, who then have a choice of providing these samples to patients. As a result of these methods, the industry has seen revenue around $400 billion with 90% of physicians having a relationship with a drug company (Campbell 2007). Moreover, the prices of prescriptions continue to rise; a copay of a generic drug is $11.72, preferred brand drug is $36.37 and a specialty drug is $58.37 (Coleman and Geneson 2014). Although the profits are immense in the numbers demonstrated above, it is no surprise when pharmaceutical drug companies elevate their prices even more. For instance, recently Turing Pharmaceuticals raised the price of their medication Daraprim from $13.50 to $750. Keep in mind, this medication is used for threatening parasitic infections, aids, and cancer with alternative options currently found to be inefficient (Pollack 2015). Another example of this practice involves cycloserine, a drug used to

One added reason could be the current high number of mergers in the industry. Which in the long run leads to less competition, driving the innovation down and the prices up. In the United States, there are no regulatory efforts to stop the companies for charging so much. They are one of the only nations that believes in a free market for drug pricing. They are only one of two countries that allow direct-to-consumer advertising of pharmaceuticals. As of today the United States does not import drugs from

spends more on drugs? It’s true that in the U.S., as in many wealthy OECD countries, pharmaceutical spending has been declining in real terms. For some countries, this trend is explained by cuts in government spending in the wake of the Great Recession. In the U.S., much of this decline is explained by the fact that patents on a number of top drugs have expired, meaning they can be replaced by cheaper generics. This effect is expected to last another two or three years; after that, future trends in spending are harder to predict.

In 2016, the health care industry saw prices rise. Many drugs continue to go up in price and even generic brands were up nine percent in 2014. This is largely due to inflation and companies trying to figure out where to price their drugs. Many companies have also merged with other health care companies which have also caused this increase.

First, I will attempt to analyze the scope of this issue. According to a survey by The Commonwealth Fund, many prices have increased to such a point that in 2012 over twenty-one percent of adult Americans who were prescribed a medication skipped filling their prescriptions or skipped doses because of cost. In addition to this, in a study published in the Journal of the American Medical Association, researchers found that the prevalence of prescription drug use among people twenty and older had risen to fifty-nine percent in 2012. Using the United States Census Bureau, we can find that the United States population in 2012 yielded approximately 315,000,000 American citizens,

U. S. citizens pay the highest prescription drug prices in the world. This is an injustice that must be corrected. The "U.S. forbids the import of prescription drugs by anyone other than the original U.S. manufacturer, and even then only when the drugs meet all the approval requirements of the U.S. Food and Drug Administration (FDA)" (Barlett & Steele, 2004). Prescription drug prices are outrageously high in the United States because of the influence of advertising on consumer purchasing, the misleading statements by pharmaceutical companies about the cost of research and development of new drugs, the manipulation of patent laws, the antiquated laws regarding importation of

In recent years, prescription drugs spending has been one of the most rapid rising components in the healthcare industry. In 2008, prescription drugs spending

However, prescriptions drugs has seen a steady cost increase. Not only in out of pocket care but also total health expenditures. In 2015 fourty-two percent of prescribed drug spending is expected to have been financed by the public sector in comparison twenty-two percent is covered out of pocket by Canadians. Fortunately in recent years the trend of prescription drug spending has slowed. The lower growth rate is in part to patent expirations and implementations of generic pricing policies.

The rise in costs of prescription medicines affects all sectors of the health care industry, including private insurers, public programs, and patients. Spending on prescription drugs continues to be an important health care concern, particularly in light of rising pharmaceutical costs, the aging population, and increased use of costly specialty drugs. In recent history, increases in prescription drug costs have outpaced other categories of health care spending, rising rapidly throughout the latter half of the 1990s and early 2000s. (Kaiseredu.org, 2012).

Most of this increase reflects the cost of research, and the time it takes to develop a medication, and have it approved by the Food and Drug Administration. A medication takes years to advance from idea, to theory, to research and testing, and finally to approval. All of this time costs money.

Prescription drug prices rose three times faster than inflation in the decade between 1981 and 1991, making the pharmaceutical industry the nation's most profitable business. Prescription drugs even exceeded the rapidly rising inflation rate for all other medical services. They now represent at least 10% of all the medical

have soared in recent years, with the price of a single medicine often exceeding an

Steenma, David, MD, and Adam Elshaug, MD. "Journal of Oncology Practice." High Cancer Drug Prices in the United States: Reasons and Proposed Solutions. American Society of Clinical Oncology, n.d. Web. 09 Feb. 2016.

Yes, there is an impact on the pharmaceutical company, like those in the US as a result of differential prices between that country and other nations.