Today, many Americans face a significant financial burden when they need to purchase prescribed drugs. On the one hand, it is because approximately “95 percent of specialty drugs and 85 percent of orphan drugs cost more than $10,000 per patient per year” (AHIP, 2018, p. 1). On the other hand, the America’s Health Insurance Plans (AHIP, 2018) stipulates that a substantial number of branded drugs have become more expensive by 10% or more over past years (p. 1).
Consequently, buying the necessary medicine becomes a severe challenge for many individuals. This situation means that it is essential to address the issue of making drugs affordable for the population. Prescription drug cost transparency is a useful way to result in a change because this policy has the potential to make the health care industry more accessible by keeping the prices down.
To begin with, one should explain the excepted impact of the given initiative on the health care sector. When drug producers are forced to justify why they make prices higher, consumers and appropriate bodies will have an opportunity to prevent it. It refers to the fact that state health agencies and insurance providers can negotiate drug prices in this case and move them down (AHIP, 2018). The scenario above implies two essential consequences that need further consideration.
Firstly, the issue under analysis can reduce total health care spending, which is beneficial for the nation’s economy. Secondly, prescription drug cost transparency is going to result in the fact that American citizens will have fewer out-of-pocket expenses because insurance plans will cover most of their expenditure. Thus, it is challenging to deny the fact that the cost transparency requirements are going to make the American health care industry better.
In addition to that, it is necessary to justify why the incentive under consideration is going to be effective. Firstly, drug price transparency laws make the producers explain why they decide to make their products more expensive. This fact, in turn, results in added scrutiny among individuals, which creates unnecessary attention to drug companies. Secondly, the AHIP (2018) uses the example of California to demonstrate the effectiveness of the policy.
The American organization explains that “continued public pressure and demand for accountability will likely slow the pace of drug price increases” (AHIP, 2018, p. 10). Consequently, the two examples above demonstrate that prescription drug cost transparency is going to raise public awareness concerning the topic. This attention is sufficient and necessary to prevent drug producers from aggressive price increases in the market.
In conclusion, I would like to present my personal opinion on the policy and its effectiveness. Even though the issue under consideration comes from the health care industry, it also focuses on economic principles. Thus, if I see that I have to pay more for an appropriate product or service without a justified reason, I will likely question the necessity to do it. In this case, the drug price transparency laws are expected to reveal whether such grounds exist. If a price increase is a way for a company to gain more profit, transparency will result in social pressure that will make this company keep the price down. Consequently, the information above stipulates that prescription cost drug transparency is an effective way to make appropriate drugs more affordable for numerous American citizens.
Reference
AHIP. (2018). Why prescription drug price transparency matters . Web.