Addressing Healthcare Cost - Prescription Medications

In the United States, the cost of prescription drugs is one of the highest in the world. Several factors are contributing to the high cost of medications. Part of the issue is the restricted importing of medications from Canada, Europe, and other countries in which many of the drugs are manufactured. In Switzerland and other European countries, the respective agencies responsible for prescription drugs negotiates directly with the manufacturer. The negotiation centers around the cost-benefit analysis of the medication and if it should be in its formulary. The Ministry of Health spends a considerable amount of time researching which new drugs should be included in their agreement. In the United States, the Food and Drug Administration does not regulate other than the safety approvals of the introduction of medications into the healthcare system. The pharmaceutical agencies can charge whatever fees they decide. In many cases, individuals end up paying significant copayments to have access to the medications.

In part, the US pharmaceutical industry has lobbied Congress extensively to prohibit any significant changes in implementation laws. Also, the Medicare Modernization Act does not allow Congress to negotiate prices of medication. Unlike the Veterans Administration and the Department of Defense can negotiate directly with the pharmaceutical companies regarding the costs of their products. Besides, these agencies have a defined formulary which restricts the medications available to enrollees. These reports can be modified based on clinical need.

The significant profit margins particularly from Medicare beneficiaries by the pharmaceutical companies combined with their aggressive lobbying campaign will continue. There is no foreseeable end to their price gouging.  Taxpayers are continuing to pay higher prices then one should.

A related challenge is the ability of pharmaceutical companies to market directly to consumers. Other than the disclosure required by the FDA the direct marketing is thought to have a significant impact on many consumers' decisions. Of course, the drugs marketed are typically newer and have a higher price. There is a discussion that the US should ban direct to consumer prescription drug marketing.

Elijah E. Cummings Lower Drug Costs Now Acpassed in House in the fall of 2019 could save more than $345 billion in federal spending over the next seven years. Per the Congressional Budget Office, the out of pockets costs could be reduced by $158 billion over the decade. Specifically, this bill requires the Health and Human Services Sectary to negotiate rates directly with drug makers on as many as 250 prescription drugs that Medicare spends the most on. The Republican-controlled Senate has blocked movement on the bill. In the meantime, taxpayers and consumers continue to pay unreasonable prices for prescriptions.

In an article appearing in the New York Times, The American Way of Paying for Drugs Isn't Working a new poll from the Kaiser Family Foundation, reveals at least 85 percent of Americans — including a majority of both Democrats and Republicans — want the government to negotiate directly with drug makers and for the results of those negotiations to apply to private insurance as well as to Medicare. Seventy-two percent want drug makers who refuse to participate in such negotiations to face financial penalties, as they would under the proposed bill.

Support for the same ideas shrank when respondents were told that research and development would be imperiled because of these changes. The reluctance is not surprising, given the fear-mongering by the pharmaceutical industry and its supporters in Congress. However, Americans are increasingly desperate for affordable medicines. Given the system they have now, change may soon become the far less frightening option.