Introduction
The cost of medication in the United States has been worryingly skyrocketing over the last few years, which has led to the rising costs of overall medical care. According to a 2019 report by Kurani, Cotliar, and Cox, the costs of medication in the US during the same year were $1126 per capita, compared to peer countries that spent $552 per capita. Similarly, Buchholz asserted that US residents pay twice as much for prescription drugs as in peer countries. The results established that monopoly, increasing list prices for new drugs, and production costs were some causes. Research evidence has also established that the high costs lead to the dramatically high cost of outpatient care, fatalities, and non-adherence, leading to poor health outcomes.
Causes
Monopoly
The big pharma conspiracy has been spinning over the years regarding organizations in the pharmaceutical industry that intend to keep the industry going by inventing newer drugs. According to Vincent Rajkumar, monopoly is a significant contributor to the high costs of medication in the United States (1). Most pharmaceutical firms with the financial muscle to research, develop, test, and distribute new medications lack competition due to the funds required to produce a drug successfully.
In the United States, few companies have remained the only producers of insulin – Novo Nordisk, Sanofi-Aventis, and Eli Lilly (Vincent Rajkumar 1). Such organizations set the price for all new drugs, leaving retailers with fewer options for the price they set and for selling the treatments to the patients. Smaller organizations often lack the financial resources to remain in operation and compete with established firms.
Increasing List Prices
The cost of medication in the US has remained relatively high due to the increasing list prices, which are the costs at which a firm introduces a new product into the market. Langreth asserts that the average annual medication cost per person is $1300 higher than the global average. The same report indicates that the median launch price for a year’s new drug supply in the United States was $180,000 as of 2021. This price has been increasing steadily over the years, leaving retailers in the healthcare sector with no option but to raise their prices.
The hike was attributed to the annual increase in list prices by about 5% and the fact that producers pass these overheads on to consumers (Langreth). The government and non-profit organizations only absorb a small amount of the expenses. Managing list prices with policies has proven difficult for legislators due to other factors influencing market prices.
High Production Costs
The cost of developing drugs has also contributed to the expensive medications in the US. According to Vincent Rajkumar, producing a single drug until its approval takes about 12 years and costs around $ 3 billion, with only a 10-20% success rate (2). Pharmaceutical companies invest significant money into developing medications, but only a tiny percentage of these drugs receive approval for distribution in the market. However, Vincent Rajkumar asserts that these costs are inflated, while the beneficial outcomes of such medications are inversely proportional to the development cost (2). Moreover, the high cost may not be justifiable, as the government and charitable organizations allocate a substantial amount of public funds toward the research and development of pharmaceutical products.
Effects
Fatalities Due to the High Costs of Outpatient Care
Research evidence suggests that the high cost of medications in the United States has a disproportionately negative impact on the cost of outpatient care. Preventable debilitations and high mortality rates have been associated with the high cost of drugs in the country. According to a publication by the Council for Informed Drug Spending Analysis (CIDSA, more than 112,000 senior adults lose their lives due to a lack of access to quality medications because of the high cost.
The cost effects on untreated yet avoidable outcomes related to lack of medication access are also significant. The healthcare sector in the United States spends approximately $17.7 billion more on treating preventable illnesses (CIDSA). Government-sponsored agencies such as Medicare and Medicaid spend significant funds reimbursing facilities for unpaid medical services.
Non-Adherence and Poor Health Outcomes
Non-adherence and medication compliance are among the most significant challenges faced by healthcare professionals in the United States. Failure to complete a medication regimen because one cannot afford the drugs leads to higher readmission rates and early deaths (Schwartz and Steven 88). Health conditions worsen without the necessary treatment, leading to a higher admission rate for this patient population. Consequently, healthcare spending skyrockets as the system accommodates emerging and existing untreated conditions.
Conclusion
The high prices for medications in the US compared to other peer nations have significant negative implications for patient well-being. Analysis of existing evidence revealed that the rising costs of drugs result from monopoly, raising list prices for new drugs, and high production costs. The high costs have also been proven to have adverse implications on the health and well-being of patients. Death and high treatment costs due to non-adherence and lack of access to high-quality medications are some of the health system’s adverse effects. There is a need for more initiatives to streamline the costs of drugs in the country.
Works Cited
Buchholz, Katharina. “U.S. Drug Prices Sky-High in International Comparison [Infographic].” Forbes, Forbes Magazine, 2022. Web.
“High Drug Prices and Patient Costs: Millions of Lives and Billions of Dollars Lost.” Council for Informed Drug Spending Analysis. 2020. Web.
Kurani, Nisha, Cotliar, Dustin, and Cox Cynthia. “How do Prescription Drug Costs in the United States compare to Other Countries?” Health Systems Tracker, 2022. Web.
Langreth, Robert. “Why Prescription Drugs in the US are so High.” Bloomberg, 2022. Web.
Schwartz, Lisa M., and Steven Woloshin. “Medical Marketing in the United States, 1997-2016.” JAMA, vol. 321, no. 1, 2019, pp. 80-96. Web.
Vincent Rajkumar, S. “The High Cost of Prescription Drugs: Causes and Solutions.” Blood Cancer Journal, vol. 10, no. 71, 2020, pp. 1-5, 10:71. Web.