How Does Rising Costs of Prescription Drugs in the Us Affect the Overall Health Industry?

For over the years, health status becomes demanding to a human being because of the illnesses that could be acquired.

Extending one’s life is the primary reason of people who have taken the prescription drugs rigorously. However, to some other patients, deciding to stay on drugs or not makes them torn towards a hard decision. It is because the increase in prices from pharmaceutical companies affects their capacity to afford their medication.

The United States’ consideration to allow drug companies to set their price made it easier to bargain. Just as how the demand for the product increases, the companies often raise prices too most especially for many prescribed drugs.

Recently, drug makers have developed life-changing therapies for a swarm of serious illnesses which includes multiple sclerosis, hepatitis C, and several cancers.

However, the supplies of these new medicines are controlled entirely by the drug manufacturer.  With this, it gives them a monopoly of the drug to the patients for many more years while taking medication. During that time, raising the price as frequently is profitable, likewise to how the market could bear.

This situation only shows that the demand of the medicine rises quickly because of people’s medication.

Deficit Pocket of Patients

Earlier this month, Pfizer, one of the world’s largest producers and makers of drugs, announced that they would raise prices on around one hundred drugs they have, as of July 1st. Included in the brand of drugs affected are Chantix – a smoking-cessation aid, Lyrica –a nerve pain medication, Lipitor – a treatment for high cholesterol and triglyceride levels, Xalkori – a lung cancer drug, and even the famous, Viagra – a treat erectile dysfunction and pulmonary arterial hypertension.

This announcement from Pfizer got harsh criticism from many organizations, people, and even the president of the United States because this will be the second time that the company increased its prices in the year 2018.

These criticisms made the company decide to suspend their intention of increasing the drug’s prices temporarily. However, inevitably, the additional costs of pharmaceutical drug companies are not new to the Americans because they have done the same strategy for about a past three years.

Aside from the company abovementioned, a French manufacturer, Sanofi has done the same thing; increasing the prices of drugs.

Therefore, biannual price hikes in the United States are frequent and inevitable.  However, why do the rising costs of prescription drugs in the US affect the overall health industry?

Contrastingly to the argument of the American citizen, the Pfizer and other companies argue that even if they have increased their retail prices, they might be offering rebates on the products.

Moreover, because of these rebates and discounts, they don’t profit much from price hikes.  Instead, the discounts offered by pharmaceutical companies go towards winning over a contract with Pharmacy Benefit Managers (PBMs) and insurance companies.

With this, still, the price hike affects people who are in an average status.  The increased expense of drugs become the more pressing concern for them mainly when the purpose of medication is for life-saving treatment, especially to people who had lapses in medical coverage.

Admittedly, these people who have highly expensive costs for their medication screams for prescription drug discounts still to extend their lives.

Implanted False Hopes

The administration of President Trump with his several congressman and senators have outspoken their insights regarding the increase of drug from the pharmaceutical companies.

President Trump himself has stated towards American citizens with great conviction that the drug prices would fall substantially in the not-too-distant future. He even publicly shamed Pfizer because of their recent increase.

It may sound victorious to some people, but little is being done to change the underlying problem.  Besides, the administration’s design in falling down the prices of drug fails to discipline the big pharmaceutical companies in any meaningful way.

Despite President Trump’s public humiliation towards Pfizer, this does not change the culture that the company has because they only temporarily canceled the price increase, but in the future; they would still enforce their rate.  Thus, lowering the prices would not be possible.

A knotted marketplace

The Food and Drug Administration (FDA) does not require drug companies to prove that their newly produced drugs are better than the existing products.  However, there is little information available for comparing one drug to another.  Because of this, many physicians write prescriptions for the drugs they are most familiar.

At the same time, there are underlying factors that cause drug market to be twisted.  These factors include:

Patent Law: Pharmaceutical companies become skillful in planning strategies to prolong their monopoly on a drug beyond the expiration of its original patent.  There is an insight that to continue charging whatever the company wants for its product, maintaining its monopoly should be perceived.

Multiple Middlemen: The stable market connection between the manufacturer and the insurer makes you turn a blind eye to what is the real price of the drug you have picked in the pharmacy. What you have paid for is the agreed-upon co-pay rate.

Nowadays, insurance companies rarely negotiate prices directly to the drug manufacturers. Mostly, most insurers make arrangements with Pharmacy Benefits Managers, and these people stand in behalf of the company in negotiating the prescription drug rebates and prescription drug discounts.

Takeaway

The increasing cost drug in the market had led to many people in the United States at risk with their health concerns and issues.

Because people are concerned about drug prices; in fact, more are being forced to make trade-offs between paying for their drugs and food or rent.

If pharmaceutical companies would impose their biannual price increase for every year, the rising cost of prescription drugs could cripple healthcare, as well as raise health risks, for millions of people in America.

If this trend of drug market is unstoppable, prescription drug discounts and rebates could probably help their agony towards the price hike.

The plans that the administration, pharmaceutical companies, pharmacy benefit managers, and other organization and companies who are maintaining the United States as a progressive nation, will soon be revealed if it has any meaningful impact towards the citizens.