Resolving the Higher Prescriptive Drug Cost Problem Term Paper
- Length: 5 pages
- Subject: Business - Advertising
- Type: Term Paper
- Paper: #85658337
Excerpt from Term Paper :
Resolving the Higher Prescriptive Drug Cost Problem
Resolving beneficiary or medical consumer issues with respect to the rapidly rising costs of drugs is a heated issue I government and in every American's living room. Not only are those living in assisted living facilities but also parents with children and the increased number of retiring baby boomers are being financially affected in significant ways. In addition those Americans without proper insurance coverage are beset with problems of being able to obtain needed medications whatsoever. As healthcare costs continue to rise many Americans are finding healthcare coverage less affordable. Besides increasing the national deficit increased healthcare costs are taking a significantly larger portion of government spending away from other programs that need money badly. Without a doubt, strategies are badly needed to moderate growing healthcare costs and these strategies must not only come from the government but also from the consumer, pharmaceutical companies, and medical practitioners. Without a well-healed cooperative and facilitative effort between these groups America's citizenry will soon not be able to afford necessary health coverage. This in and of itself is not a favorable testimonial to a country that is amongst the wealthiest and technologically advanced in the world. The remainder of this paper will, therefore, assess those strategies being presently employed and/or suggested to resolve the issue of high drug costs. To this end discussion will be presented from the following perspectives: importations, price controls, and Medicare implications. First, however, a short recap of prescriptive drug costs is necessary in understanding the strategies being used or proposed by the aforementioned groups.
Recap on Prescriptive Drug Costs. The primary issue is that healthcare costs have greatly exceeded the growth of the economy. Even though the total healthcare spending in America is only approximately 12% the growth in prescriptive drug spending has risen steadily and even exceeded other healthcare service costs (Lundy, Finder & Claxton, 2004). Whether or not the government can, or has the right to, intercede in the escalation of prescriptive drug costs is up for heated debate. However, knowing that prescriptive drug spending has grown over 15% compared to a 9% increase in overall healthcare spending is a very noticeable concern from all perspectives (National Health Expenditure Tables, Sept. 2004). According to the pharmaceutical companies the increase is a direct result of the following:
1. An increased use of prescriptive drugs.
2. Higher manufacturing costs for new drugs.
3. Increased retail prices for drugs now being offered and the willingness of the medical consumer to pay the prices.
Although prescriptive drug prices are a reflection of medical consumer demand this demand it is also a direct reflection on how consumer demand in the growth of third party payment for much of the prescriptive drug cost. In other words, the medical consumer will continue to purchase these drugs knowing that insurers make the majority of claim payments. As a side bar note it is interesting that the significant increase in direct-to-medical consumer marketing by drug companies has parlayed the use of prescriptive drugs to rise as well.
Knowing that the prescriptive drug issue commands substantial attention, as well as being a real threat to the health of America, programs must be instituted to either curb cost increases or find ways to offset the financial burden of the medical consumer. The remainder of this report will look at several ways to deal with the predicament.
Drug Importation. The current status of Americans being able to buy prescriptive drugs in countries wherein the purchase price is significantly lower is currently illegal in the United States. The degree to which, however, the federal government adheres to its own legislation is not readily known. What is known, however, that drugs purchased in countries like Canada can oftentimes mean the having or not having a prescribed medication or even buying the drug or buying groceries. For example, according to McKenzie, (2003) the price of Mirapex, used to treat Parkinson's Disease, in the United States is $263 while the same prescription in Canada is $157 -- a staggering 40% difference. With such discount pricing it is no wonder the American medical consumer prefers to purchase prescriptive medication from Canada or at least demand the same pricing structure in America. What is interesting as well is that the Canadian medical insurance coverage system is not terribly unlike that of the…