New and improved medicines
New and improved medicines aim to improve the treatment of chronic problems, but their high costs make them inaccessible to the people who need them the most. The United States has the largest per capita prescription drug spending in the world (Kesselheim, Avorn & Sarpatwari, 2016). Prescription medications account for almost 17% of all personal health care facilities (Kesselheim, Avorn & Sarpatwari, 2016). In recent years, this phenomenal rise in medication costs has sparked widespread outrage among consumers, prescribers, insurers, and policymakers (Waskiewicz & Krutz, 2016).
Increasing competition as a solution
Increasing competition is a viable alternative to rising medication costs. Market exclusivity significantly contributes to increased drug prices (Kesselheim, Avorn & Sarpatwari, 2016). Ensuring that generic drugs are availed in time, setting more stringent requirements for award and extension of exclusivity rights, allowing drugs from foreign countries into the US and making physicians, payers, and policy makers more aware of available drug alternatives can help stimulate competition, hence reduce high drug costs (Kantarjian & Rajkumar, 2015; Kesselheim, Avorn & Sarpatwari, 2016).
Greater transparency as a solution
Greater transparency is a competing solution for reducing drug prices. This solution can be enforced by requiring more substantial evidence about comparative cost-effectiveness of therapeutic alternatives. Kesselheim, Avorn and Sarpatwari (2016) assert that there exists no evidence supporting a direct relationship between R&D costs and prices. Although R&D costs may justify drug prices, most US drug makers calculate drug prices based on what the market will bear. Therefore, greater insight into clinical research and drug approval data will enable patients and physicians to opt for the high-value drugs to use.
Increasing competition is the preferable solution
Increasing competition is the preferable solution because lack of competition of generic alternatives motivates pharmaceutical firms to charge any price. Drug approval and patents grant manufacturers monopoly rights that motivate them to charge higher prices for their medications. Unfortunately, Kesselheim, Avorn and Sarpatwari (2016) found that many factors, undermine payers' power to negotiate for more affordable prices. Therefore, increased competition is a more viable solution to lower drug prices, ultimately increasing access to health care.
Government responsibility
Federal, state, and local governments have a fundamental responsibility to ensure their citizens have access to quality affordable health care services (Waskiewicz & Krutz, 2016). The Legislative Analyst's Office (LAO) reports that the government purchases a lot of prescription drugs to facilitate access to health care (Lao, 2005). Also, federal and state government have a duty to ensure access to affordable health care services. They negotiate for lower prices of medications. For example, the federal Medicaid Program requires drug manufacturers to provide discounted prices to comply with established federal legal requirements (LAO, 2005). This provision essentially permits the Medicaid Program to purchase medications at a price that is about 60 percent lower than the average wholesale price (LAO, 2005).
Government's role in reducing drug prices
Moreover, the Federal, state, and local governments have a responsibility to provide health insurance benefits. Through the Public Employees' Retirement System (PERS) and the Veteran Affairs (VA), the government offers employees and veterans with health insurance and retirement benefits, respectively. Additionally, the federal government has a duty to ensure proper administration, operations, and procurement of drugs.
Responsibilities of the federal government branches
The three arms of the federal government have distinct responsibilities in reducing drug prices. The executive plays a critical role in making policies to facilitate access to quality and cost-effective medications (Waskiewicz & Krutz, 2016). Also, it has a mandate to ensure proper administration and operation of health care programs, such as the Medicaid Program and the Federal Supply System (LAO, 2005). The legislature is primarily responsible for enacting, passing, and repealing health care laws and regulations (Waskiewicz & Krutz, 2016). Efforts by the Congress to fix or crap the Affordable Care Act is a good example of an effort by the legislature to lower the cost of health care services. The federal Public Health Act is another product of the responsibility of the legislative arm of the federal government.
Judiciary's role in regulation
Lastly, the judiciary is primarily responsible for the regulation and enforcement of laws and regulation on health care services, such as the ACA, the Federal Public Health Act, and Antitrust laws, among others (Waskiewicz & Krutz, 2016). In collaboration with the executive, the justice system is expected to enforce compliance and ethics in the manufacture, supply, advertising, competition, and insurance of health care services.
References
Kantarjian, H., & Rajkumar, S. V. (2015, April). Why cancer drugs are so expensive in the United States and what are the solutions? In Mayo Clinic Proceedings (Vol. 90, No. 4, pp. 500-504). Elsevier.
Kesselheim, A. S., Avorn, J., & Sarpatwari, A. (2016). The high cost of prescription drugs in the United States: origins and prospects for reform. Jama, 316(8), 858-871.
Legislative Analyst’s Office. (February 2005). Lowering the State’s Costs for Prescription Drugs. Accessed from http://www.lao.ca.gov/2005/prscrptn_drugs/prscrptn_drugs_021005.htm
Waskiewicz, S., & Krutz, G. S. (2016). American government. OpenStax College, Rice University.
