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. It is said that name-brand prescription drugs in Canada cost approximately 40% less than they do in America. But it is illegal for the transport of drugs from Canada to America.
A blockbuster drug is the one which generates more than $1 billion of revenue for the pharmaceutical company that sells it each year. "In the pharmaceutical industry, a blockbuster drug is termed as the one that achieves acceptance by prescribing physicians as a therapeutic standard for, most commonly, a highly prevalent chronic (rather than acute) condition. 'Blockbuster’ drugs play a key role in the pharmaceutical industry. However, discovery and development alone are not enough to create a blockbuster; the firms must be able to market the drug aggressively to achieve the potential gains from their innovation. A report from URCH Publishing estimated that one third of the pharma market is accounted for by blockbuster drugs by value.
(Allan Rubin) This is due to the factors of expensive technology, less stringent HMO cost management, and more specifically to this paper, rapidly rising drug costs. Surveying nearly 3,000 employers, Mercer Human Resource Consulting finds that their health-benefit costs rose 10.1 percent this year, while inflation hovered around 2 percent. And as the research and development of these drugs continue to outpace inflation, most Americans will continue to pay for this trend. How so? There are two main reasons for this phenomenon.
It is quite amazing that if you look at the top 100 overall donators in 2002 that seven of them are the largest drug manufactors in the world, and the are all heavy republican supporters. On the same side to this is the insurance companies. They also give large contributions to politicians. In 2002, companies such as Blue Cross / Blue Shield, AFLAC, and Cigna, were all huge contributors to the Republican Party. Since the late 80’s republican have always been able to raise more soft money.
PROBLEM STATEMENT Teva Pharmaceuticals, the firs multinational pharmaceutical company of Israel had become a successful global giant in the industry of generic drugs. After experiencing a long period of success and growth in the generic drug industry against some big western pharmaceuticals the company had acquired many well known pharmaceutical companies and had achieved its goal of 1 billion dollar theory seemed to be in troubles in building a new strategy and vision to compete with the rapidly growing generic industry. They confronted two big issues as key hurdles in their way. Many new players entered to the market copying the same techniques for growth like Teva to capture a significant market share by offering low prices due to their low cost strategies. The entry of these players made the industry intense with tough competition, low profit margins and collapsed prices.
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 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.
• Reximet was used to treat acute migraines. However, the company would begin selling this drug in 2012. Industry Background Pharmaceutical industry used to be a powerhouse industry with revenue of billions dollar. 1995 through 2002 was the hey-day period of pharmaceutical industry. In this period, profitability for the pharmaceutical companies was three times more than profitability of the median of all Fortune 500 companies in 2004.
Discussion Post #4 1.Socialize the EpiPen Summary: This article talks about EpiPens but also emphasizes the dysfunction of the American pharmaceutical system. One of the main problems specified in the article was the enormous price increase of EpiPens. Between 2007 and 2016 the price for a set of two EpiPens went from $100 to $600(Jacobin, Sept. 2, 2016). The company that sells the EpiPens is Mylan Pharmaceuticals, however they outsource to Pfizer’s Meridian Medical Technologies, which manufactures a whole lineup of autoinjector products(Jacobin, Sept. 2, 2016). And due to the sky high prices for EpiPens the CEO of Mylan Pharmaceuticals, Heather Bresch, had a huge salary increase from $2.5 million to $18.9 million(Jacobin, Sept. 2, 2016).
Americans spend far more per person on the costs of litigation than any other country in the world. The excess of the litigation system are an important contributor to “defensive medicine” – the costly use of medical treatments by a doctor for the purpose of avoiding litigation. As multimillion-dollar jury awards have become more commonplace in recent years, these problems have reached crisis proportions. Insurance premiums for malpractice are increasing at a rapid rate, particularly in states that have not taken steps to make their legal systems function more predictably and effectively. Doctors are facing much higher costs of insurance.
Blockbuster drug sales produced large revenues for their companies leading this period of growth. However, events in recent history have begun to impact the industry and the future of pharmaceutical patents. The 2008 financial crisis significantly impacted growth as demand of medicine decreased. This economic recession, combined with multiple key blockbuster drug patents expiring in the last 4 years, changed and continues to impact the future of the pharmaceutical industry and new drug innovation. Approximately 81 branded drugs expired 2010-2013 ( ) including 30 blockbuster drugs each previously generating over a billion in sales annually.