Healthcare Final Course Project – Increasing Costs of Prescription Pharmaceuticals
In America, the growing costs of prescription pharmaceuticals constitute a critical and far-reaching issue that requires our attention and action. As healthcare costs continue to rise, an increasing number of Americans face the difficulty of filling important prescriptions and meeting other critical needs, resulting in negative health consequences and additional loads on the healthcare system. Recognizing the importance of this issue, this course project will thoroughly investigate the complicated problem of high medicine pricing. This work aims to look into the different elements that contribute to this quandary, assess the deep ramifications for individuals and the healthcare system, and suggest practical and effective answers.
Causes of High Prescription Medication Costs
The rising costs of prescription pharmaceuticals in the United States result from a complex interaction of circumstances, making it critical to understand the core reasons to effectively address this issue. The involvement of research and development (R&D) is one notable component. Pharmaceutical corporations frequently use high medicine prices to explain the significant expenditure required for the development of new treatments (Dusetzina et al., 2022). While this rationale is accurate in some ways, it lacks openness because corporations rarely publish the exact split of R&D spending. The prevalence of monopolies and pricing abuses in the pharmaceutical business is another key factor in this problem. Some firms use monopolistic control over specialized pharmaceuticals to impose exorbitant prices, leveraging limited alternatives.
Impact on Individuals and the Healthcare System
High prescription medicine costs have a significant and far-reaching impact on individuals and the healthcare system. Many people are forced to make difficult choices between acquiring critical medications and meeting other basic requirements such as shelter, food, and education. These financial difficulties have serious health consequences, including pharmaceutical non-adherence, delayed treatments, and, in certain circumstances, aggravation of health issues. As a result, the chance of hospitalizations and additional healthcare costs rises. High drug prices put a great strain on the healthcare system as a whole. Furthermore, government programs such as Medicare and Medicaid incur a significant burden due to excessive prescription medicine expenditures, depleting resources that may be better spent in the healthcare sector.
Proposed Solutions
A diversified approach is required to address the issue of rising prescription medicine costs in the United States. Three recommended ideas stand out as viable options. First, increased pricing transparency can throw light on pharmaceutical companies’ opaque pricing methods. Making it mandatory for these corporations to disclose the true costs of medicine development, marketing, and distribution can provide consumers, healthcare professionals, and legislators with the knowledge they need to evaluate and understand pricing decisions. Another important answer is to promote the use of generic drugs. Generics with the same active ingredients and efficacy as brand-name medications are often far less expensive. Encouraging doctors to prescribe generics and expediting the generic medicine approval process can increase competition and drive down prices (Wang et al., 2022). However, government agreements for Medicare and Medicaid have been selected as the most effective alternative. Allowing these government programs to negotiate prescription drug prices, as in Canada and Europe, allows the government to use its purchasing power to secure more affordable pharmaceuticals for the American people, easing financial burdens on individuals and the healthcare system while promoting greater healthcare equity.
Increasing Pricing Transparency
The significance of transparency in prescription pharmaceutical pricing cannot be emphasized. A more informed and accountable pharmaceutical industry can emerge by requiring pharmaceutical companies to disclose the full costs of developing, marketing, and delivering their goods. Transparency may help consumers, healthcare providers, and legislators in a variety of ways. It will enable patients to make more educated decisions about their treatment alternatives, which can boost patient trust in the healthcare system. It will also enable healthcare providers to choose prescriptions based on a more complete understanding of the costs for both patients and the healthcare system. Transparency can also be a significant tool for policymakers in developing more effective rules and policies to combat rising drug costs.
However, introducing pricing transparency is not without difficulties and potential stumbling blocks. The pharmaceutical business may be reluctant to share genuine costs, citing worries about confidential information and potential consequences for innovation (Shaw & Mestre-Ferrandiz, 2020). Furthermore, the immense complexity of the pharmaceutical supply chain, which involves numerous intermediates, can make tracing the actual costs at each stage difficult. It is equally critical to analyze the potential consequences for the pharmaceutical sector. While increasing openness can result in a more balanced pricing landscape, it may also have an influence on profit margins and revenue patterns, potentially leading to industry pushback.
Promoting Generic Medications
Promoting the adoption of generic drugs is a promising strategy for lowering prescription drug expenditures. Generic medications, which have the same active ingredients, dose form, potency, and administration technique as brand-name drugs, offer significant cost reductions and better accessibility. It is critical that both healthcare providers and patients comprehend generic drugs. Generics are not only less expensive, but they are frequently as effective as brand-name medications. When healthcare practitioners are encouraged to prescribe generic alternatives when appropriate, patients can make financially prudent decisions without jeopardizing their health.
To promote generic medications, regulatory changes are required to streamline generic drug approval and market availability. Competition can be promoted by speeding the approval process and assuring the timely market launch of generics, resulting in price reductions across the board. Several countries, like Canada and European nations, have already shown success in pushing generics. Using these countries’ experiences, the United States may discover best practices and apply successful techniques to assure the cost-effective supply of generic pharmaceuticals, decreasing the financial burden on patients and the healthcare system.
Best Solution: Government Negotiations
Implementing price negotiations for government programs such as Medicare and Medicaid is the most effective way to combat the high cost of prescription medications in America. These programs are now prohibited from engaging in price discussions with pharmaceutical corporations, resulting in increased medicine costs. However, the solution is simple: use the government’s purchasing power to negotiate cheaper medicine prices. This technique has worked well in other countries with lower drug prices, such as Canada and some European countries. A legislative action plan is required to put this proposal into effect. Federal legislation should be implemented to allow for Medicare and Medicaid drug plan price discussions, which will necessitate collaboration between lawmakers and pharmaceutical industry representatives (Bendicksen et al., 2021). Concurrently, grassroots movements and public support must be developed to apply pressure on decision-makers and ensure the strategy’s effective implementation. Allowing government-driven price negotiations not only cuts healthcare costs but also encourages equitable access to critical pharmaceuticals, making healthcare more inexpensive and sustainable for all.
Conclusion
The issue of high prescription medicine prices has reached a tipping point, necessitating prompt attention and action. High medication costs have serious ramifications for individuals, the healthcare system, and the nation’s overall healthcare sustainability. Among the proposed options, government negotiations for Medicare and Medicaid drug pricing appear to be the most effective, promising relief for patients and the healthcare system. By overcoming the current constraints on bargaining and leveraging the government’s purchasing power, the United States can duplicate the success shown in countries with lower prescription costs. This legislative action plan must be bipartisan, focusing on patient affordability and healthcare sustainability. Furthermore, public support and advocacy efforts are critical in achieving this shift.
References
Bendicksen, L., Rome, B. N., Avorn, J., & Kesselheim, A. S. (2021). Pursuing value‐based prices for drugs: A comprehensive comparison of state prescription drug–pricing boards. The Milbank Quarterly. https://doi.org/10.1111/1468-0009.12533
Dusetzina, S. B., Huskamp, H. A., Rothman, R. L., Pinheiro, L. C., Roberts, A. W., Shah, N. D., Walunas, T. L., Wood, W. A., Zuckerman, A. D., Zullig, L. L., & Keating, N. L. (2022). Many Medicare beneficiaries do not fill high-price specialty drug prescriptions. Health Affairs, 41(4), 487–496. https://doi.org/10.1377/hlthaff.2021.01742
Shaw, B., & Mestre-Ferrandiz, J. (2020). Talkin’ about a resolution: Issues in the push for greater transparency of medicine prices. PharmacoEconomics, 38(2), 125–134. https://doi.org/10.1007/s40273-019-00877-3
Wang, Y. (Iris), Li, J., & Anupindi, R. (2022). Manufacturing and regulatory barriers to generic drug competition: A structural model approach. Management Science. https://doi.org/10.1287/mnsc.2022.4423
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Question 
Increasing Costs of Prescription Pharmaceuticals
Choose a Course Project for which you will identify and solve a healthcare problem. Assuming you have been listening to the news or following talk shows for the last 6 months (more like 2 decades), you know that healthcare is a key and contentious issue in America. There is no shortage of concerns, nor are there approaches on how to best solve them. (Some people call healthcare, from a problem standpoint, a target-rich environment.) The Course Project requires you to identify a problem and arrive at a recommended solution along with its implementation. Just the topic’s outline to be fully developed after 5 weeks.
Textbook of Reference:
Folland, Sherman, et al. The Economics of Health and Health Care. (8th Edition). Taylor & Francis, 2017.