Prescription Drug Price Controls Essay Essay

The first anti-drug price gouging law went into effect in Maryland on October 1, has already survived its first legal challenge, and may yet prove to be a cut-and-paste model for a nation generally pissed that drug makers are hiking the prices of medicines they need to live.

I spoke about how the pharamactuel industry has been ungoverned, resulting in monopolies being created. As new drugs are developed and marketed at higher prices, than those already on the market, existing drug prices rise as well; even if the demand has not increased. Also, prices increase without much knowledge of its effectiveness versus existing drugs.

For the past couple of years there has been a bitter battle between Canada and the United States over the importation of prescription drugs. Unfortunately due to amount of uninsured Americans who cannot afford these drugs in the United States, they must travel across the border and buy them in Canada. Currently the United States has made it illegal for anyone but the manufacturer or a selected representative to import prescription drugs into the United States. However the increasing difference in price between prescriptions in Canada and the United States has created an opportunity for Canadian businessmen and women to export these prescription drugs from Canada to the United

Prescription drugs have been proven to be much worse than marijuana. The fuss people make over the legalization of marijuana does not make sense when one thinks about the effects that overdosed or misused prescription drugs has had. Overdosed prescription drugs kill around 47,055 people a year, and overdosed prescription drugs have no death record. The health effects of overdosed prescriptions are much worse when compared to overdosed prescription drugs. Also, the dangers of prescription drugs are portrayed as often and as correct as the dangers of marijuana.

This is a great present to the drugstore industry. There are new drugs to treat previously untreatable illnesses, and new diseases, e.g. Viagra for men’s unhappiness, Zoloft for depression, Avastin for colon cancer, Herceptin for breast cancer, Nicotine patches for smokers to kick the habit, Tamiflu for a potential bird flu pandemic, vaccine for swine (H1N1) flu pandemic, Tekturna/Rasilez for hypertension and various new drugs for AIDS and Attention Deficit Disorder (ADD). The new medicines are very expensive, e.g. a year’s supply of Avastin costs about $55,000. Eli Lilly has sold about $4.8 billion of Zyprexa in 2007 for schizophrenia and yet most people have never heard of this medicine. There are existing drugs now approved to treat new illnesses and thus increase their sales revenue. For example, Lyrica was originally intended to treat pain caused by nerve damage in people with diabetes. It is now approved by FDA to treat Fibromyalgia which affects 5.8 million Americans per WebMD. Big advances in genetics, biology and stem cells research are expected to produce a new class of drugs to treat diabetes, Parkinson’s and various rare genetic disorders. For example the new drug Ilaris from Novartis targets genetic causes of an inherited disorder that there are only 7000 known cases worldwide. However, Novartis hopes to gradually broaden its drugs to a blockbuster drug to more common disorders caused by similar genetics. Technology and modern life introduce and

Anyone who has purchased prescription medication has probably wondered why they cost so much. The pharmaceutical industry consist of thousands of firms engaged in one or several functions of discovering, developing, manufacturing and marketing medicines for human use. The price paid to a retail pharmacy for a drug is negotiated by the PBM (Pharmacy Benefit Manager) and the pharmacy or pharmacy chain. The pharmacy is left with an option of refusing the business, raising its prices for cash customers or reducing its operation margin. Rising prices for goods encourage producers to find ways of supplying more also guiding purchasers to switch to cheaper alternatives. The price mechanism encourages the productive and careful employment of scarce resources and directs innovative efforts where they are most needed.

Finally, the increase cost of drugs from pharmaceutical companies are have contributed to the ongoing cost in health care for which the increase in medical technologies are attributed towards. “J.D.Kleinke (2016) reports this medical progress is expensive. In numerous therapeutic areas, better medicines increase costs, at least in the short run; in other areas, better medicines that reduce costs in the short run add costs in the long run. Burton Weisbrod and Craig LaMay summarize this overarching impact of innovation in their observation that “the use of antibiotics to prevent deaths from infections can cause people to live longer and hence to die from heart disease and cancer, which typically entail even greater costs.” Break through drugs

Pharmaceutical Benefit Managers, PBM use several different pricing strategies and tools to charge employers for prescription drugs. These strategies help PBM’s turn a profit while still being able to create a fair and affordable situation to the employer. The goal for PBM’s is to remain competitive while generating a business contract between the organizations and pharmaceutical companies. The organization must be able to take an active role in their contracts to continue to provide quality and affordable prescription drug programs. “A comprehensive generics program can significantly lower prescription drug costs, control utilization and play a major role in helping to improve overall patient outcomes” (Jones, 2003).

This paper will explore how recent pharmaceutical developments and policy changes have created one significant barrier to cure: high price and cost.

Firstly, unlike in the rest of the world, drug manufacturers in the United States set their own prices. Countries with national health programs have government agencies that negotiate drug prices. However the various insurances (Medicare, Medicaid, and private insurance) of the United States healthcare system do not have such negotiations. When the Medicare drug benefit was created in 2003, Medicare (and therefore the Department of Health and Human Services) was banned from negotiating drug prices. Medicaid must cover all drugs approved by the Food and Drug Administration, regardless of whether a cheaper or more effective drug is available. Private insurers rarely negotiate prices because the third party pharmacies that administer prescription drugs often receive payments from drug companies to shift market share in their favor. Secondly, the way the pharmacy sector is structured allows for monopolies to form for certain drugs, which prevent generics from entering the market and reducing the drug cost. The United States patent system, which is intended to promote innovation, allows drug manufacturers to have a monopoly over the production of patented drugs and drugs used to treat rare diseases for 20 years. At the conclusion of these 20 years, the companies often maintain their monopolies from changing the nontherapeutic parts of drugs, extending the patient, or paying off companies threatening to release generic versions of the drug. When generics hit the market, drug prices decline to as low as 33% of their original brand name cost on average. The average brand name drug costs $307, while the average generic drug costs $30 (Worth 2015). However the monopolization of certain drugs has prevented this. Hence why while many congressman and congresswoman claim to be ideologically opposed

Governments must not, however, accept uncritically the claims from the industry that any constraint on profits will threaten truly valuable innovation. However, new drug developments that lead to improvements in health outcomes are valuable to society and truly innovative drugs should be appropriately rewarded. (Mossialos)

Because pharmaceutical companies have so much power over pricing, they have started to raise prices with no motive other than more profit. In recent years, the industry has seen a steep price increase in drugs. These increases, in some cases, seem inexplicable. Regarding this is the recent example of the EpiPen, a common emergency drug used for patients with severe allergies. In the past, the EpiPen was available to patients for as low as 40 dollars. Now the price is “almost 600 dollars.” (Woodward, Layton) The problem with this is the device has had no fundamentally different changes to it. This means the pharmaceutical company responsible for the EpiPen raised the price for no reason other than more money in the company’s pocket. A

According to an online article, a 2000 study published in the Journal of Health Economics estimated that bringing a new drug to market costs the innovator on average eight hundred and two million dollars over a period of ten to fifteen years. In 2008, the average price of a brand-name drug was $137.90, while the average generic prescription was $35.22 (Health Smart website, 6). The copayment also costs less for the generic medication than the brand-name because the generic did not have to have years of extended research. Today, almost half of the prescriptions are generic (Health Smart website, 7). Price and differences in these medications have an impact on how society looks at the medications they need or

Big Pharma,which has been a main contributor in innovation, has increasingly de-committed itself from the high-side of R&D and is letting smaller biotech companies and the National Institute of Health do most of the heavy lifting. The National Institute of Health is actually a government funded program that has invested close to $900 billion in research since the 1930s. With that being said, the consumer is essentially paying twice for pharmaceutical research. However, just because they are spending less doesn’t mean that they

Although R&D has been retained by the large pharmaceutical firms, there has been a continuous decline in the R&D productivity. Controlling R&D is imperative to the success of a Pharmaceutical firm. However, as the pharmaceutical industry is maturing, there are diminishing returns to the R&D investment. Fewer and fewer blockbuster drugs are being discovered and therefore R&D is not the most value adding component in the value