The rising healthcare costs continue to be a problem in the Unites States. A major factor is the increased spending on prescription medications. This issue remains heavily debated in the political arena and in healthcare. In the United States people pay the highest cost for prescription medications in the world despite income levels or insurance coverage. The difference in prices is enormous compared to other countries such as France, Switzerland, Japan, Canada, and Germany. This problem is especially true of new drugs and pharmaceutical agents with prices that are constantly rising. There are numerous suggestions being made to combat the high cost of prescription medications. Three key solutions the Unites States should utilize that is being used in other countries to lower the cost of prescription medications includes external reference pricing, drug pricing caps, and a new pricing system that focus on therapeutic benefits. If no major solutions are implemented to solve this problem many people will continue to be forced into bankruptcy or people will go without the medications that they need to sustain their health. The United States has the highest cost of prescription medications in the world.
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Many studies have been done addressing this issue. According to a study by the General Accounting Office, Americans pay 32% more for similar medications than Canadians. In 2015, a study by the Kaiser Foundation found that the average cost for Cymbalta in the USA was 75% higher than in Canada (Do, 2016). Moreover, in 2012 of the twelve drugs approved by the US Food and Drug Administration (FDA) for various cancers, eleven of them cost more than $100,000 per year. Overall, cancer drug prices are 20%-40% lower in European countries than in the United States. Not only are the prices of medications for cancer rising but also for other serious conditions such as hepatitis and multiple sclerosis. In fact, people with insurance are being affected by the high cost of prescription medications. This problem is causing insurance companies to limit access to expensive medications resulting in many people not obtaining drugs that they need. The high pharmaceutical costs also affects the amount health insurance companies can spend on each individual leading to high out of pocket cost for US citizens than in other countries. Both the pharmaceutical companies and insurance companies are blaming each other as the main reason for the high cost of drugs (Nelson, 2014). According to the Commonwealth Fund 2010, 48% of medical bankruptcy cases were linked to high out of pocket cost for prescription drugs. In addition, the uninsured and low-income individuals (income below $11,770 per year) are also affected by high medication cost. In 2010, 35% of low-income Americans did not fill their prescription medications or missed doses due to high drug costs than other countries (Do, 2016). One reason prescription drugs are higher in the Unites States than other countries is due to a lack of consumer protection from increasing drug prices. The drug companies believe that certain drugs have a significant value to society and patients, and therefore the high cost is justified. In fact, the Center for American Progress reported the main reason this problem occurs is because of a lack of governmental regulations. Whereas, in Canada the price of medications is managed by the Patented Medicine Prices Review Board that establishes the range on the price of each drug manufactured. However, in the United States organizations such as the American Enterprise Institute believes that governmental regulations would result in decrease funding for pharmaceutical research and development. Nevertheless, statistics do not support this argument. In 2001, a study by the National Bureau of Economic Research reported that some companies received an additional profit of $600 million from Congress as an incentive for research and development and that there is a 55% reduction in research and development cost due to taxpayers funded research. Likewise, Congressional investigators from the General Accounting Office determined that $262 million each year is spent by the drug industry on campaign contributions, federal lobbying, and advertisements for candidates than research and development (Do, 2016). Another reason for the increasing cost of prescription medications is that hospital systems are purchasing the practices of independent physicians such as oncologists and are charging more for
Many studies have been done addressing this issue. According to a study by the General Accounting Office, Americans pay 32% more for similar medications than Canadians. In 2015, a study by the Kaiser Foundation found that the average cost for Cymbalta in the USA was 75% higher than in Canada (Do, 2016). Moreover, in 2012 of the twelve drugs approved by the US Food and Drug Administration (FDA) for various cancers, eleven of them cost more than $100,000 per year. Overall, cancer drug prices are 20%-40% lower in European countries than in the United States. Not only are the prices of medications for cancer rising but also for other serious conditions such as hepatitis and multiple sclerosis. In fact, people with insurance are being affected by the high cost of prescription medications. This problem is causing insurance companies to limit access to expensive medications resulting in many people not obtaining drugs that they need. The high pharmaceutical costs also affects the amount health insurance companies can spend on each individual leading to high out of pocket cost for US citizens than in other countries. Both the pharmaceutical companies and insurance companies are blaming each other as the main reason for the high cost of drugs (Nelson, 2014). According to the Commonwealth Fund 2010, 48% of medical bankruptcy cases were linked to high out of pocket cost for prescription drugs. In addition, the uninsured and low-income individuals (income below $11,770 per year) are also affected by high medication cost. In 2010, 35% of low-income Americans did not fill their prescription medications or missed doses due to high drug costs than other countries (Do, 2016). One reason prescription drugs are higher in the Unites States than other countries is due to a lack of consumer protection from increasing drug prices. The drug companies believe that certain drugs have a significant value to society and patients, and therefore the high cost is justified. In fact, the Center for American Progress reported the main reason this problem occurs is because of a lack of governmental regulations. Whereas, in Canada the price of medications is managed by the Patented Medicine Prices Review Board that establishes the range on the price of each drug manufactured. However, in the United States organizations such as the American Enterprise Institute believes that governmental regulations would result in decrease funding for pharmaceutical research and development. Nevertheless, statistics do not support this argument. In 2001, a study by the National Bureau of Economic Research reported that some companies received an additional profit of $600 million from Congress as an incentive for research and development and that there is a 55% reduction in research and development cost due to taxpayers funded research. Likewise, Congressional investigators from the General Accounting Office determined that $262 million each year is spent by the drug industry on campaign contributions, federal lobbying, and advertisements for candidates than research and development (Do, 2016). Another reason for the increasing cost of prescription medications is that hospital systems are purchasing the practices of independent physicians such as oncologists and are charging more for