Over the course of medical history, many medications have been developed to prescribe to patients. With a constant improvement of medicine, new research was conducted to develop better medicine to replace the past medications. However, to begin new research, funding is needed to consider starting the research. To continually be able to fund research, many pharmaceutical companies have raised the prices of current medications. The inflation of pharmaceutical medications has created much uproar amongst the consumers. The consumers are faced with the problem of being able to continually afford their medications. Consumers are arguing that their affordable health care is no longer affordable. Whereas the pharmaceutical companies are arguing that the inflation is to help better medicine by using the profits for research. The situation boils down to one question: should pharmaceutical companies be able to increase the cost of prescription medications that are high in demand? While in some cases the increased profit has been used to fund research, in many other cases, the pharmaceutical companies have been reaping the excess profits. Private companies should not be able to drastically increase the price for prescription drugs because they pose a …show more content…
These companies justify their price increase as funding for research to find a better drug that can replace the current drug. As recorded in The Price of Innovation: New Estimates of Drug Development Costs, “Although the industry engages in many forms of innovation, in general the most significant is the discovery and development of new chemical and biopharmaceutical entities that become new therapies.” To continually develop new, ground breaking medicine, the pharmaceutical companies need to raise their prices to help fund the research. If there is no money in the research funds, then the budget inhibits further
Abramsons points are well taken, and it truly is a shame that the medical industry has become a business. In my opinion, if the pharmaceutical industry was taken out of the hands of the capitalist marketplace and given the to the government, it would become less of a business. Prescription drugs are not ordinary consumer goods; they are products that can ultimately save lives. If a money-oriented company controls these products, it is inevitable selling the drug would become a greater priority than actually creating a beneficial drug. Which as a result, will to the creation many well-marketed yet ineffective
In the recent years the drug industry underwent a significant transformation. Many of the big companies generate high revenues, which allow them to expand. Some of them expand on their own others through mergers and the buying of smaller companies.
This is definitely a problem for consumers because they can have ties with the pharmaceutical and they have the ability to evoke the best interests for their company when pricing drugs. According to the drug makers and the intermediaries, the higher cost are needed to pay of rebates and providing discounts for insurers and employers. Despite providing incentives to those with insurance, this alienates those who have little to no insurance, they are left to burden the higher drug prices. In the U.S., there isn’t a checks and balances system when it comes to drug pricing like in the U.K. therefore some critics do not blame Mylan for raising the price for these drugs. Making and testing for innovative medicines requires years of research, which means money. Therefore, I do understand that drug makers, the pharmaceutical company and its investors want to get paid for the amount of time and money that they put into their new drug. However, I believe that they need to find that particular medium that helps the people especially those who are less fortunate and in need for this life-saving medication while being able to make a
On Chapter 7, Frances describes ways the diagnostic inflation can be tamed. He stated, “We are spending a fortune fighting the losing war against illegal drugs, while barely lifting a finger to fight an easily winnable war against the misuse of legal grips”(p. 211). Before reading this book, I would have never imagined that we had a problem with people being prescribed an excessive amount of drugs they do not need. I agreed with Frances when he mentioned ways big pharma could be tamed such as reducing or removing advertisements on televisions, magazines or internet. Advertisements are very powerful and pharmaceutical companies have snuck their way into the homes of individuals. While I was reading France’s ideas, I agreed with a lot of them, but I felt that the people are still
In America, it has become a battle to earn a high paying job to cope with the expenses of a typical American. It has become even more of a battle for some people to afford medical prescriptions to keep healthy. Health becomes a crucial issue when discussed among people. No matter what, at one point or another, everyone is going to stand as a victim of the pharmaceutical industry. The bottom line is Americans are paying excessive amounts of money for medical prescriptions. Health-Care spending in the U.S. rose a stunning 9.3% in 2002, which is the greatest increase for the past eleven years. (Steele 46) Many pharmaceutical companies are robbing their clients by charging extreme rates for their products.
The main controversy here is the question of whether or not Mylan was price gouging with the EpiPen. Unfortunately the answer to this question does not matter. It appears as tho the 500% raise in the price of the EpiPen over the past 7 years is ethically and morally wrong, but when it comes to the law they have done nothing wrong. Pharmaceutical companies are legally allowed to charge whatever they want for their products. The largest insurer in the United States of America, which is Medicare, actually rewards doctors for prescribing costly drugs. On top of being rewarded for issuing costly drugs, it is illegal for Medicare to negotiate prices on drugs. (Source) This most definitely does not help the price situation when it comes to pharmaceuticals.
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 costs in the United States.1
Throughout many generations the success of medicine has been dog-eared throughout history, from penicillin being created through colonized bacteria on an agar plate to chemotherapy being used to combat the ailments of cancer, we as a society rely a great deal on the effectiveness of medicine. Due to this realization one can agree that it is imperative that the medications that are being distributed and placed on the pharmaceutical market are tested and analyzed at all angles and perspectives to ensure they work effectively and successfully resulting in moderate to no side effects. The progressive industry of medicine has greatly increased since the early nineties thanks to the advancement in medical technology making
Studies have shown that college graduates on average earn more money in their lifetime than non-college graduates. But college grads who didn’t have scholarships spend years paying off student loan debts. Ronald D. Lankford, an editor and writer for the journal The Rising Cost of College, and Richard Vedder, a writer and economics professor at Ohio University, have written articles on their views of college costs and the reasons they think why it is so steep. Lankford, author of Introduction to the Rising Cost of College, explains why he thinks college costs are so high and how it affects people. Vedder, author of Pell Grants Raise the Cost of College and Cause Education Inequality, cites Pell Grants and financial aid as important factors in the rising cost of college. Although both authors offer strong arguments, I think Vedder presents the stronger argument because he has more credibility, being and economics professor.
Due to patents, Pfizer and other companies in the pharmaceutical industry are not always competing in a monopolist’s competition. When a business has a patent they are the only manufacturer who can produce the product until the product expires, so it is clear that the firm can act as a monopoly while in control of the patent. As a monopolistic company, the company has market power, giving it the capability to adjust the market price of a good. The main goal for a monopolist and business owner is to maximize their profits, however, there are rules they have to abide by. The monopolistic companies still have to keep up with the market demand curve. The point at which they decide to produce will rest on their own acidities of revenue, risk and effort. The company also needs to know the price elasticity of the curve: the greater the price elasticity, the more a company such as Pfizer will struggle to establish high prices and a high volume.
The Economist, a highly respected magazine that was started in the mid-1800s, in their article, Why Drug Prices in America Are so High, published on their website, the Economist, addresses the topic absurd drug costs in America and constructs that it is legal for the companies to raise the prices. They support this claim by stating that American companies can “ set whatever official price they like” (Why Drug Prices in America Are so High), and by saying, “Insurers and the government then whittle down that price using methods that vary from one type of patient to the next” (Why Drug Prices in America Are so High). The Economist’s purpose is to clarify why the drug prices are over the top-in the opinion of the general public-in order to calm
There are three issues when it comes to the health care cost rising. The first is the rising cost in prescription drugs. The second area of rising cost is the increased technologies when it comes to the medical industry. The third problem is the aging population. Prescription drugs are the area of the fastest growing health care expense, and it is projected to grow at 20 to 30 percent each year over the next several years. There are many newer, more expensive drugs on the market, and the use of these prescriptions is exploding. In addition, with so much television advertising, many consumers ask their doctors for expensive, brand name drugs when there may actually be a generic drug that works just as well.
In recent years’ health reform has been a driving force in the United States political system. If you watch the news you will undoughtabley hear how citizens, the government, or the economy is or might be effected by some sort of change in medical regulation. One of these hot topic issues is the cost of prescription drugs. Every major drug market besides the United States regulates the price of drugs in some way (Abbott and Vernon). By the United states not doing so many believes it opens consumers up to be exploited by large pharmaceuticals companies. Other believe regulating drug prices limits investment, innovation, and competition in the pharmaceutical industry. In many ways both views are correct yet the later may have more long term lasting
For years, the price of drugs have been held in congress because the cost of pharmaceutical drugs is the most controversial aspect of this industry. Stuart Schweitzer, a professor of health policy and management at the University of California Los Angeles, author of Pharmaceutical Economics and Policy, comments on this topic. According to Schweitzer, consumers are more sensitive to drug prices more than the price other health services. Schweitzer states, “Consumers are more likely to complain about a $50 bottle of tablets than a $500 radiology procedure, or a $5000 hospital stay”. This may be due the fact that these procedure and hospital stays are less frequent than taking prescription medication that is needed continuous. Most patients are seeing multiple doctors and nurses, that is accounting for the cost. Whereas at a pharmacy, they only see the pharmacist for a consultation and then the patient goes home to take their medication. Consumers may expect this to be cheaper because they are not receiving extensive care. To bring a new drug onto the market in the 1990s, it costed $359 million compared to $1.7 billion in 2003. Pricing of most products is usually based on marginal cost, which is the change in the total cost that comes from producing one extra item. However, this is not the case with the pharmaceutical industry because if prices were based on marginal cost, drugs would be a lot more
does not spend adequate money on preventative healthcare, especially considering that millions of Americans are diagnosed with diseases that can be cheap to prevent, but expensive to treat. Approximately half of adult Americans suffer from chronic diseases that require long-term treatment; some of the most common include heart disease, cancer, obesity, and diabetes. Certainly, these ailments are not always completely preventable, but in most cases, taking care of one’s health can prevent the acquiring of heart disease and obesity. With the U.S. now using both public and private based health insurance, this does not hinder private companies from implementing supply and demand. Another driving force of the high healthcare costs in the U.S. is the prescription drug market. The United States is one of only two countries in the world that allows millions of dollars each year to contribute to the advertising of prescription drugs. Of course, the cost of advertising causes the price of certain drugs to rise, Americans could benefit from laws prohibiting this type of health-related spending, and they could also benefit from government regulated healthcare