The Impact Of Prescription Drugs On The Health Sector

The utilization of prescription drugs has increased across all age groups in the US, with 50% of Americans taking at least one prescription drug (Rice & Unruh, 2016). This can be attributed to physician-induced demand, substitution of pharmaceuticals for other medical regimens, commercialization of the products, increase in the aging population and drug insurance coverage, and also the increase in chronic conditions. Lathan discusses the startling fact that the rate increase of prescription drugs purchased was considerably higher in contrast to the US population growth - 71% and 9% respectively (Rice & Unruh, 2016, p. 264).

Shortages of prescription drugs in the United States are a serious threat to our nation’s health and safety. At first blush, this problem appears fairly simple and straight forward to solve. In reality, there is a complex web of causation with a number of root causes contributing to drug shortages. The aim of this paper is to answer the question: How do we mitigate prescription drug shortages? This discussion is written from the standpoint of advising the current presidential administration how to address this crisis. This essay begins with a discussion regarding the background of the issue. Next, the landscape, including stakeholders in this matter is identified. Following, political, social, economic, and practical factors surrounding

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.

Lynas, K. (2010, November/December). Canadian pharmacists journal: Universal pharmacare could cut up to $10.7 billion from Canada’s annual drug bill. Notes, 143(6), 262. doi: 10.3821/1913-701X-143.6.262

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 the modern age of technological and medical advancements such as organ transplants and robotic limbs, Americans have developed unrealistic expectations about prescription drugs. The false belief that the right pill in the right dosage can cure all has led to a national epidemic: over prescription. Since the 1970s, the average American’s expenditure on prescription drugs has doubled because not only are new treatments for almost every ailment now available, but they are also aggressively advertised on television, the internet, and social media. At the same time that the American population confronts health issues associated with rising age, obesity, and stress levels, prescription drugs promise a quick fix for everything from depression to acne to insomnia leading to a one pill fix all.

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.

Many patients are finding it more difficult to afford their prescription medications. Comparing health care expenditures in the United States, prescription drug costs rank third compared to hospital expenses and physician services (Omojasola, Hernandez, Sansgiry, & Jones, 2012, p. 479). The rising cost of prescription drugs is concerning to many patients. “The high out-of-pocket prescription drug cost is associated with medication non-adherence and adverse health outcomes” Omojasola, et al., 2012, p. 480).

When asked most people will say they are on at least one medication whether it be something over the counter or prescription. John Tirman in his book “100 Ways America Is Screwing up the World” writes about Big Pharma and how it has become both a domestic and global problem. Tirman discusses how American drug companies have a greater profit margin then most fortune 500 companies writing, “in 2004, the top nine American drug companies- this listed on Fortune 500- made median profit margin of 16 percent of revenues compared with 5.23 percent for other Fortune 500 industries” (Tirman 90). He goes on to talk more about how Big Pharma is dominating the industry, telling the reader that they are spending more on advertising than research. Tirman

According to IMS Health (2015) over 4.3 billion prescription drugs were dispensed in the United States and Narconon (2015) reports that the decade ending in 2008 saw a four hundred percent increase in people seeking treatment for opioid addiction. Prescription drug abuse is an epidemic that transcends all socioeconomic boundaries in our society and is destroying lives, families, and whole communities, especially those most vulnerable; the physically and mentally ill. For one to better understand the full social implications of this issue, it is important to first review the history, impacts, and current debates around prescription drug abuse in the United States, and to then evaluate the connections that are formed by the culture, social roles, social inequalities, and social changes in our society.

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 costs of prescription drugs in the United States: pharmacists’ voice must be heard is an article released by the American Journal of Health-System Pharmacy on April 16, 2016. The article addresses the rising cost prescription drugs in today’s society and how healthcare spending affects millions of citizens. The article stated that the reason why healthcare expenditure is rising is due to the aging population and the increasing prevalence of noncommunicable diseases. Without counting severe conditions, chronic conditions are highest in the older population ages 65 and above.

Are prescription drugs overprescribed? Are patients being prescribed the correct medications that they actually need? Are generic drugs doing the same for the human body that marked up brand name medications are? These are some of the public’s biggest questions that can be easily answered by research. Everyone is affected by medication and healthcare in general today. Many real life scenarios are offered throughout this writing to support the argument. The following thesis statement is a worldwide problem. Unfortunately, the United States has the largest problem with inflation of drug cost and over-prescription of medications. Many people are to blame: drug manufacturers, insurers, prescribers, educators, and many others. A change is needed.

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

The article intentionally opens with a contrast between the drug price trend of the brand-name drugs and the generic ones. The general picture is painted as gloom since the cost of health care and in particular spending on drugs went up in 2011 by a significant 13.3% and was expected to rise further in the year 2012 if the manufactured of such brand-name drugs did not get any cheaper. The ill intention of the drug manufacturers is depicted in the comparison between the percentage increases they have inflicted on the consumers against the 2% inflation rate for the same period. The article then pins the annual drug spending of the nation at $314 billion for the year 2011, a whole 4% increase over the previous year. Vinay therefore implies that the clients choosing within the basket of brand-name drugs are paying much more higher prices than before as compared to those who may be making choices between the brand-name basket and the generic basket.