Strategic Human Resource Management : The Pharmaceutical Industry

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

Dr. Champion is a top notch drug specialist with a careful comprehension of drug store. In any case, following 33 years in business – an aggregate of about 60 years in drug store out and out – changes in the pharmaceutical

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.

Anyone who has purchased prescription medications has probably wondered why they cost so much, and rightfully so. Medication prices in the United States have been on a steady increase for decades, however, prices have been drastically increasing as of recent. Pharmaceutical companies have tried to justify these price increases due to the demand, the high cost of research, and the high costs of development and approval. Notwithstanding, the extent to which the prices have increased is not justifiable. Americans should be against these high medication prices and take action because pharmaceutical companies are taking advantage of our healthcare system in order to capitalize from the sick. In order shed some light on this issue, the magnitude, scope, and consequences of these prices must be examined.

Between 2001 and 2011, the average patient’s out-of-pocket (OOP) cost for brand-name prescriptions rose by more than 80% (Tungol, et al., 2012, p. 691). The increasing OOP costs have contributed to a decrease

Pharmaceuticals in the United States have been on the rise for years and everyone is trying to find was to get cheaper medication. New generics, 4 dollar lists, and coupons have been a growing force in pharmacies in the past few years. Some might think, “There has to be laws against rising prices, right?” Well, sort of.

Anyone who has purchased prescription medications has probably wondered why they cost so much, and rightfully so. Medication prices in the United States have been on a steady increase for decades, however, prices have been drastically increasing as of recent. Pharmaceutical companies have tried to justify these price increases due to the demand, the high cost of research, and the high costs of development and approval. Notwithstanding, the extent to which the prices have increased is not justifiable. Americans should be against these high medication prices and take action because pharmaceutical companies are taking advantage of our health care system in order to capitalize from the sick. In order shed some light on this issue, we must examine the magnitude, scope, and consequences of these rises in price.

Opening a new pharmacy can be challenging and requires a lot of research. It is important to become familiar with pharmaceutical companies, and build a good working relationship. New pharmacies should also focus on building a good product base. Research should be conducted on quantities, what is in demand, and how quickly it can be

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).

The purpose of this paper is to address the state of prescription drugs within today’s society, as it relates to areas of development, approval, cost, and competition. There will be look at the benefits, such as continued research may lead to the development of new breakthrough prescription drugs. On the opposite end, there is an in-depth look at the controversies that surround the prescription drug industry. These include the many, often severe side effects that accompany many of these drugs, and how they are allowed to make it past FDA approval, as well as, a look at the rising cost of prescription drugs. Tied with the increasing cost, is a comparative look at the similarities and differences of brand name drugs versus their

Other factors include the use of distribution systems, drug shortages, pharmaceutical manufacturer mergers and acquisitions, patent expirations, cost and availability of raw materials, and profit driven businesses (Abramowitz & Cobaugh, 2016). The rising cost of prescription drugs and healthcare in general challenges the access and affordability of quality care to consumers not just in the United but also consumers around the world (GEN News, 2012). In addition to cost and access to care, the continuous rise in prescriptions drugs may have a negative effect on utilization of healthcare and satisfaction with healthcare system (Abramowitz & Cobaugh,

The prices in which the medication are set are necessary for research and development. Roy P. Vagelos, discusses about the problems regarding restricting pharmaceutical companies in the written source Are Prescription Drug Prices High?. For instance, it can reduce the profits to support research investments, since it costs at least $231 millions dollars in order to bring one new prescription medicine to the market and in a pharmaceutical company like Merck, there are at least 4500 researchers who work to develop products (Vagelos 1). In other words, it costs millions for researches to develop at least one new drug to present to the market and it also costs to pay researchers to help develop these new drugs. In addition, the article The Real Cost of “High Priced” Drugs,

In a recent study the prescriber was offered education and an financial incentive. “López-Picazo Ferrer et al.32 carried out educational and financial incentive intervention. This study indicated an absolute increase of 14.8%. in generic prescriptions after intervention (from 2.79% to 17.63%), with a reported average impact.” (Guttier, 2017, p. 13) Trust has been gained within generic drugs over time as users see the same effects with the generic drug that is cheaper. Lack of education on generic drugs make pharmacist and doctors second guess a generic drug. Users have a lack of knowledge until the try the generic drugs. Convenience can also be explored when using a generic drug. Evidence quality of generic drug companies is constantly on the rise due to the success level they are having. Generic drug companies are getting a return result ,positively supporting the cause of generic drugs. United States generic drug companies are comparing generic drug prescription compared to what it has been statistical in the past years. Prescriber’s opinion on generic drugs are changing over time. Generic drug companies are helping prescriber’s make the decision to prescribe a generic drug by educating them. Generic drug companies are providing free vouchers to allow physicians and pharmacist to help patients make medical decisions. Brand name drug companies

A substantial piece of the U.S market in the health sector is run by the prescription drugs and, therefore, making the U.S the global largest market of pharmaceuticals accounting for more than a third of the world’s expenditure on drugs. It is estimated that in 2014 slightly over $300 billion were spent on prescription drugs which accounts for roughly 10 cents of every dollar in the U.S healthcare market. The U.S expenditure on prescription drugs has been growing at an annual rate of 11% for the last 27 years between 1980 and 2007. But the expenditure has slowed between 2008 and 2013 to about 2% annual average which has been occasioned by several reasons including the 2008 financial quagmire which was also responsible for the reduction in the overall U.S health care costs, the application of controls towards insurer drug utilization and also the production of a less amount of new blockbuster drugs within that period (Institute for Healthcare Informatics, 2014)..

The article “Painful Prescriptions” illustrated the effects of the rising costs of prescription drugs on patients and pharmacies. The gross profit has always been large for prescription drugs, as it takes pennies to put compounds together, but as of recently the costs of certain drugs has skyrocketed, yielding major profit margins for companies. Pharmacy benefits management (PBM) has been used to “lower” costs, and yet the PBM’s are making larger margins that typical pharmacies. PBMs are also a major player in the game for prescription drugs, being that they distribute 70% of the total drug sales within the United States. They are the underlying cause for high drug costs, but with traditional, there’s no way to telling what revenue is really being made and what is truly overhead costs. It’s shocking that this PBM costs so much for Americans.