Healthcare is a monopolized industry. In many ways, some people dislike this because the healthcare and pharmaceuticals continue to increase. However, the pharmaceutical monopolies can be favorable to the consumer. There are always pros and cons to everything but sometimes one must dig a little deeper to find the pros. According to the article, “Advantages of Monopoly”, the power of monopoly allows for more medical drug developments. Drug research has a high research failure but with monopoly profits, medical research is able to be funded (2016, para. 2). But to fund this research it also is a high price for the consumers to pay. The healthy people that don’t rely on medical drugs may see this as a con while the people who need medical
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Imagine this: you are tragically diagnosed with a chronic life-threatening illness. Your only hope to survive is through medication to treat your disorder. The medicine is pricy but you can work out the costs each month. One day, you go to fill your prescriptions and realize the cost of a $13 pill has jumped to an astounding $750. You need this patented medication to survive and to afford it you end up losing your home, filing for bankruptcy, and sleeping in your car. This story sounds fictional but it is the reality for many Americans who can no longer afford their grossly overpriced medications.
"In the past two decades or so, health care has been commercialized as never before, and professionalism in medicine seems to be giving way to entrepreneurialism," commented Arnold S. Relman, professor of medicine and social medicine at Harvard Medical School (Wekesser 66). This statement may have a great deal of bearing on reality. The tangled knot of insurers, physicians, drug companies, and hospitals that we call our health system are not as unselfish and focused on the patients' needs as people would like to think. Pharmaceutical companies are particularly ruthless, many of them spending millions of dollars per year to convince doctors to prescribe their drugs and to convince consumers that their specific brand of drug is needed in
The current debate over the Mylan Company’s near monopoly of the epinephrine market through its EpiPen shows what can happen without monopoly regulation. While the cost to produce an Epipen is around $30, the price to the consumer is around $300 each. The economic implications for a family that needs to keep the device on hand to save a life can be excessively high, the emotional results of not having one when you need one are debilitating. This monopoly is further enhanced by state-enforced regulations requiring that schools keep EpiPens in stock and the, so-called, EpiPen law enacted in 2013, which leave little incentive for other pharmaceutical companies to develop their own technology for fast-acting emergency devices. (Bartolone, 2016) Breaking Mylan’s monopoly will not only lead to new product development but lower prices for consumers for a life-saving delivery
The purpose of the coursework is to undertake a critical analysis and an assessment of the level of competition in the insurance industry of the country of our choice. In my case, I have decided to explore the health insurance industry of the United States. One of our aims is to
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.
The Affordable Care Act was created to assure all Americans have access to affordable insurance, but as stated by Sir Isaac Newton for every action there’s an equal and opposite reaction. As more and more people become insured in this country, the for-profit insurance companies are reaping the benefits from the legislation of the Affordable Care Act.
Prescription drug prices are on the rise in the United States. Currently, the United States does not implement a price control on prescription drugs. Every day the supply and demand for prescription drugs fluctuates. Pharmaceutical companies produce drugs that are necessary for survival. Therefore, it is necessary for research and development to continue in the United States. Those suffering the effects of exorbitant prices must do so until a generic form of a prescription drug is produced. Once approved by the FDA, new drugs will make their appearance on the market and patients will no longer suffer financially. Until then, it is necessary for pharmaceutical companies to price their drugs based on the idea of supply and demand. This produces the profit used to fund research. Price controls discourage innovation. If a price control were set in place, of course the price of prescription drugs would decrease. However, the development of new drugs decreases with it. Today’s generation would benefit from lower prices, while future generations would suffer from the loss of drug innovation.
Recently, there had been a controversy over the rise in pharmaceutical costs involving the EpiPen in the United States. The EpiPen, also known as adrenaline/epinephrine, is a widely used injection that is used to treat allergic reactions. This generic drug has been available for many years. The EpiPen controversy is a prime example of how monopoly
Consumers in the health care field value competition in many circumstances due to the fact that it assist that it can decrease costs, improve quality of health care delivered and promotes latest technology and innovation. Therefore, it is the Federal Trade Commission’s (FTC) duty as a law enforcer to thwart firms from engaging in anticompetitive behaviors that could potentially prevent the above described from happening and ultimately harm consumer. Additionally, the FTC provides proper guidance to physicians, health professionals, hospitals and providers to assist in obeying the nation’s antitrust laws (Gamble, 2014).
A lot of people, particularly the patients who need them, are beginning to wonder why American drug prices are so high. It makes sense why the pharmaceutical companies are selling at the prices they do: they are a business; and they want to, above all else, make a profit. But the real question is: what are all of the
Another group often blocked is complementary or alternative health care practitioners. These restrictions and the insurance industry unwillingness to pay for these services, gives the physicians an almost monopolist control over health care. Providers must be able to enter the market for competition to work and there must be many providers vying for the patient. To get the most out of health insurance plans Consolidation of hospitals and multispecialty group practices increases the negotiating leverage of the group but in certain areas of the US a single large medical system has become the sole provider of major health service thereby restricting competition (Shi & Singh, 2008). This consolidation while giving the hospitals and group practice leverage when negotiating prices of supplies and services tends to increase the price of health care to the patient because there is no longer any competition (Shi & Singh, 2008). For these reason “competition will remain less effective in most health care markets, because the prerequisite for fully competitive markets are not fully met” (Federal Trade, 2004, p. 20).
There are many different forms of competition among health care organizations. Some of them are the prices of services, different co-pays someone will have to pay out of pocket, lower premiums, they have to be competitive in the quality of the service in which they perform daily. The health care competition is being advertised every day. The competitive nature of business cause them to reach out to the community. The health care industry has to fight for the approval of the community, the government, the insurance companies, the pharmaceutical companies and of course the stake holders as well as future investors.
Competition drives innovation and ultimately leads to the delivery of better healthcare. Competition has played a vital role in shaping the delivery of healthcare in the United States. Competition results in lower prices and broader access to health care and health insurance. Competition among and between hospitals and physicians intensified with the development of managed care organizations. In addition to putting pressure on costs, managed care plans have pressured providers to use shorter hospital stays and to offer alternative outpatient treatments (Botti, 2007). This led to lower costs and an increase in choice without sacrificing quality. Lower costs and improved efficiency has made health insurance more affordable and available. Another benefit of competition in health care is the innovation in healthcare technology (i.e. endoscopic surgery, anesthetic agents available in ambulatory surgery centers).
I would argue against the opinion that the government cannot provide goods and services as efficiently as the private sector. The government can provide goods and services efficiently or better than the private sector. Capitalism is actually socially desirable due to its decentralized and customer-oriented nature (Hirschey, 2009, p. 10). But in a capitalism economy demand for a good such as healthcare can be high, but the prices may not be obtainable for all consumers. Also, some consumers might be intentionally excluded from purchasing a good in order to save the firms money. This is why the Affordable Care Act was implemented.
The cost of new medical drugs seems to be accepted by many people who use them. These pharmaceutical companies increase their profits more and more each year because many people assume that it does cost a lot of money for research and development. Where in reality, they are only spending about 15% of their profit margins on research and development alone. A huge percentage of these drugs are actually tested in other countries where people are more willing to do trials with these drugs because they cannot afford them. Not only are there more people who are more willing to try them, but also there is less regulation and oversight when it comes to testing. Conducting these clinical trials overseas not only saves