Specialty drug prices are high because the market for it allows such thing to happen. With specialty drugs targeting a condition that is very rare, it has a specific use. With the drug targeting such a specific thing, such as lung cancer, it must be included on insurers policies. This causes companies to make drugs for cancers that are already being treated with pre-existing drugs, flooding the market. “…there are seven drugs in human trials that target lung or and/or other cancers caused by an acquired genetic abnormality called the ALK rearrangement” which is caused by the fact “The Federal Medicare program, and most private insurers, must include new cancer drugs on formulary regardless of their price or the existence of cheaper alternatives” …show more content…
The prices of specialty drugs would be lowered because there would not be several different companies making a drug for a condition that is already being effectively treated. Specialty drug prices are so high, that even doctors and hospitals have a hard time justifying the cost of them to patients, and some are even rejecting drugs. “Sloan-Kettering is not alone in rejecting drugs whose value doesn’t justify their cost. In Arizona, Banner Health last year added an economic review to its clinical appraisal of formulary drugs” (Melanie Evans). Specialty drug prices have become so ridiculous, that Banner Health, “which owns and operates 22 hospitals across seven states,” (Evans) felt it was necessary to add an economic review for specialty drugs. “The system’s economic review uses drug industry and other models as well as internal data to project the economic benefit for a drug, which includes the price and other factors such as potential savings from a medication that prevents hospitalization” (Evans). By using their economic review standards, Banner is able to justify if a specialty drug is worth the cost to the …show more content…
The price of the scorpion anti-venom was justified because of the benefits that came with it. While Ofimerv was rejected using the same system, because the price was not justified by the benefits it presented, if any. Some experts would say that the price points are justified because of the benefits a specialty drug provides. “ A new study finds that specialty drugs often provide higher health benefits than traditional drugs, and so despite significantly higher costs, ‘may still offer reasonable value for money,’ according to research from Boston-based Center for Value and Risk in Health…” (Jason Millman). However that could be shown to be the opposite when taken into account the price of a specialty drug, and what new benefits it may provide over an existing drug already treating the same condition. “…physicians and administrators at Christiana Care Health System…saw how many newly approved specialty drugs had price tags in the tens of thousands of dollars, they decided to form a committee that use a 20-point scoring system to decide if a drug should be listed on the system’s formulary” (Jaimy
Case 1: In this case. As a certified public accountant, Erickson oversaw and initiated an arbitrary adjustment to increase cash and decrease accounts receivable. Also, Erickson signed Form 10-K with full knowledge that the financial statements include therein incorporated entries misstating revenues. As we can see from this case, Erickson’s behavior not only violate the Business and Professions Code, Division 3, Chapter 1, § 5100(g) and (i), but also against the ethical theories.
Pharmacy benefit managers (PBMs), act as an intermediary between the payor and everyone else in the health-care system. They generally make money through service fees from large customer contracts for processing prescriptions, operating mail-order pharmacies, and negotiating with pharmacies and drug makers. Their contracts can include incentives for cutting costs (Gryta, T., 2011). The use of a comprehensive generics program can significantly lower prescription drug costs, control utilization and play a major role in helping to improve overall patient outcomes. An estimated $35-$40 billion worth of branded drugs will lose their patent protection within the next five years, allowing them to be processed and marketed in generic form. Prescription drugs losing their patents are represented in some of the highest cost, highest utilization therapeutic categories, including depression, hypertension, gastrointestinal, pain management and antihistamines. The various pricing strategies that could be used to charge employers for prescription drugs used as drug pricing by PBMs utilizes the following tools are:
... (2013) IMS health study points to a declining cost curve for U.S. medicines in 2012 Retrieved from http://www.imshealth.com/portal/site/ims/menuitem.d248e29c86589c9c30e81c033208c22a/?vgnextoid=8659cf4add48e310VgnVCM10000076192ca2RCRD&vgnextchannel=437879d7f269e210VgnVCM10000071812ca2RCRD&vgnextfmt=default
Why do consumers purchase specific drugs for various ailments, sicknesses or diseases they might have? Why do physicians prescribe certain drugs over competitive drugs that may be available to the public? Why is it that most of us can easily name specific drugs that fit the many ailments of today’s society? On the surface the answer might be as simple as good TV advertising or radio commercials or even internet adds. The truth of matter is the major pharmaceutical manufacturers own the patents on these drugs and this gives them all of the marketing budget and muscle they need to promote the drug and control the pricing. The incentives for larger pharmaceutical companies are very enticing and as a result, they don’t mind spending the time in clinical trials and patent courts to get their drugs approved. Some will even get patents on the process by which the drug is manufactured, ensuring that no competitor can steal the drug or the process. This protects their large financial investment and nearly guarantees a large return for their investors. Many consumer rights groups claim this is nothing more than legalizing monopolies for the biggest manufacturers.
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.
Why are the prices so high? Some critics of the drug companies argue that the larger firms are ripping off the American public, are dishonest and, in some cases, unsafe. On the other hand, there are health care workers such as doctors and their supporters who claim that research and testing for drugs costs money. This supposedly justifies their prices for their products. Also, as an argument to their side, they say that their practice is a benefit to the improvement to mankind. It is a life saving business, but are these prices justified? As one can see, this is a very important issue in medicine today. It affects everyone involved with medicine, which is much of the American public. It also affects the physicians and drug makers.
An EpiPen is a lifesaver for individuals who have anaphylactic or allergic reactions to materials because it provides a strong, respective dose of epinephrine to adults and children. In recent news, Mylan Inc has raised the price of EpiPens to a little of $600. At first glance, I thought that the motive behind this price hike was so increase the flow of revenues for the company. Many opponents of this price hike also have a similar view. They feel that this price hike is dangerous for consumers because there are no generic products similar to the EpiPen. This monopolistic approach has raised questions as to how drugs should be sold in America. In response to the negativity received because of their price jack, Mylan has announced a coupon system that may cover up to $300 of the cost of
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.
With the low success rated private firms invest millions into several produces. When a drug does make it too market and is successful companies need to make-up money spent in development as well as the cost of drugs which did not make it to market. After all investments are taken care of there is still the need for profit. Some are concerned if the United States government implements control over prescription drug cost then private firms will be less motivated to invest in pharmaceuticals development of our fear they would not make their investment back. This would supply pharmaceutical companies with less finances for the research and development process. According to the information collected by Abbott and Vernon a drop in the price of pharmaceuticals would result in significant loss in investment of research and development (Abbott and Vernon). If drug cost were to drop 40-45% the amount of a drug to move from animal testing to human clinics would decrease by 50-60% (Abbott and Vernon). With such high risk and low reward pharmaceutical companies will likely stop or slow research on new technologies and compounds. In 1969 Canada imposed regulations on drug prices (Weidenbaum). After the regulations were imposed there was a decline in new drugs being created (Weidenbaum). This change in the pharmaceutical
The ability to become reflective in practice has become a necessary skill for health professionals. This is to ensure that health professionals are continuing with their daily learning and improving their practice. Reflective practice plays a big part in healthcare today and is becoming increasingly noticed.
Generic drug savings are widely recognized as a long-term solution to rising health costs. The 2014 Express Scripts Drug Trend Report shows that since 2008, the price of brand drugs has almost doubled but the price of generic drugs has been cut roughly in half.6 Purchasing generic versions instead of their brand-name equivalent drugs can provide substantial savings, not only for state and local governments and Medicaid programs, but also for health insurers, employers, employees, and direct pay patients.11 The need for prescriptions typically increases with age and the savings made possible by generic drug use among older adults and seniors are critical to sustaining affordable health care.6
Shkreli believes that this his decision is not only ethical but a decision that needed to happen. Shkreli argues that selling the drug at $13.50 puts Turing Pharmaceuticals at a loss, and that a price increase is necessary for Turing Pharmaceuticals to operate. Shkreli believes that if Turing Pharmaceuticals is profitable, it can use the money to do more research to develop more drugs that will help more people. In fact, in a new video, Shkreli claims that Turing Pharmaceuticals has created a drug that deals with a degenerative brain disease. He claims that only 300 people suffer from this disease and that if he didn’t raise the price on Daraprim, he would not have been able to produce the new drug. After
With the increased cost of manufacturing, pharmaceutical companies have been divesting in their smaller or less profit making operations and focus on large segments. Many Pharmaceutical companies sold their manufacturing sites to contract manufacturing organizations. The dynamics of interfacing with contract manufacturing organization added intricacy in pharmaceutical supply chain network of pharmaceutical companies.
The cost of the treatment. Sometimes the medications are not covered by insurance, so this makes it difficult to patients to adhere to buying the drugs because they don’t have the money to afford it.
The cost of US health care has been steadily increasing for many years causing many Americans to face difficult choices between health care and other priorities in their lives. Health economists are bringing to light the tradeoffs which must be considered in every healthcare decision (Getzen, 2013, p. 427). Therefore, efforts must be made to incite change which constrains the cost of health care without creating adverse health consequences. As the medical field becomes more business oriented, there will be more of a shift in focus toward the costs and benefits, which will make medicine more like the rest of the economy (Getzen, 2013, p. 439).