Abstract

Prescription drug pricing policy is a valuable and essential social policy that should be adopted by the United States of America government. The adoption would make the skyrocketing prices of the prescription drugs that have been a menace to the USA government to be slain. The state has suffered from the high costs of goods since time immemorial with more than 70% of the population claiming that the rise is unreasonable (Kesselheim, Avorn & Sarpatwari, 2016).  The surging price of prescription drugs has caused a lot of disparities to most of the USA residents causing the development of anonymous diseases and death due to the inability of the patients to purchase the drugs.  The causes of the raised price of the drugs are failure of the government to control the prices of the products, patent production rights to given companies, delays in approving generic products by FDA. The objective of the policy is to prioritize the patient’s affordability and access to medical products and to rebalance to create price competition pathway and innovation.  The merits of the policy include making more savings while maintaining individual’s life healthy. The policy has been enacted by India making its citizens enjoy the benefits of the policy. India has also remained one of the largest suppliers of prescribed drugs to many developed and developing nations.

Analysis of Prescription Drug Pricing Policy

Access to proper healthcare is deemed to be a human right. Proper healthcare comprises of access to affordable and safe prescription drugs. People from different continents and specific countries have suffered majorly in the health sector due to the high pricing of prescription drugs. The United States of America is one of the states who has severely suffered from the problem.  American’s suffers the highest in the globe due to the surging cost of prescription drugs in the state.  The healthcare providers should lower the prices of the drugs so that even the lowest earning citizens can afford the medications without struggling much (Kesselheim, Avorn & Sarpatwari, 2016).   A prescription drug does well only if the individuals who need the drug can afford it. Therefore, it is time to make policies that provide favorable prices on prescription drugs that work for all. The paper provides a detailed analysis of the Prescription Drug Pricing Policy in the USA.

The United States of America has been profoundly hit by this problem of high pricing of prescription drugs. Roughly one in a group of five Americans falling between 19 to 64 years fails to get their prescription drugs due to the insufficient amount of money to purchase the prescriptions. This is so ironical as the USA is known to be one of the wealthiest economies in the world.  Prescription drugs have been used by most people globally to increase the longevity of their lives as most of them are used to prevent illnesses and expensive treatments when the side effects of the disease aggravate. Doctors have revealed that most of the patients who seek medical attention in the hospitals are unable to afford medicine, thus get sicker and some even die (Porter & Teisberg, 2006).   Statistics have shown that the USA spends close to 370 billion dollars in purchasing prescription drugs and the expenses are surging much faster as days go by.  Around 70% of the American citizens feel that the prices of the drugs have been kept unreasonably high and the pharmaceutical industries have put priority on the profits than human life.

A number of reasons cause the problem of high prescription drug pricing. The first reason is that there are no price controls of drugs. The USA government does not regulate the price of drugs in the country; this makes the drug manufacturers to set their prices. The countries that have national health programs create entities of the government that negotiate the prices of drugs or fail to cover drugs that have been high priced.  Such bodies do not exist in the USA, and that is why prices are high. The government has also provided monopolies that protect certain drugs hence barring generics from entering the market for the price control (Lyman, 2013). The US government has given some drug manufacturers patent rights to remain the sole manufacturers of the given drugs. The main reason for the monopoly is to promote innovation. The FDA a body that controls drugs also grant manufacturers of drugs exclusivity to produce given drugs, for instance, the drugs that treat rare illnesses. Some of the companies who have been granted monopolies use some tactics of production such as changing the nontherapeutic composition of the drugs like the coating of the pills to charge highly and to remain patent in the market.

The other reasons for high pricing are that the FDA takes a more extended period to authenticate generic drugs. The application backlogs kept by FDA have contributed to the delays which is almost three to four years that generic manufacturers keep on waiting to be approved. Some of the laws of the state and other intentional policies of the federal government limit the ability of the generics’ to lower the costs of drugs.  Research shows that some Pharmacists are restricted by law to get the consent of patients before they switch to generic drugs (Kesselheim, Avorn & Sarpatwari, 2016).    Due to the high costs of obtaining the consent, most of the pharmacists abandon the process thus making the prices to remain high. The small market is another reason for the shooting in price. Some of the newly invented drugs are for conditions that are rare for instance cancer subtypes with specific and unique genetic mutations. These might only be needed by hundreds or thousands of patients. Thus to get back the research and production costs the manufacturers set high prices; therefore prescription drug pricing policy is needed.

The Prescription Drug Pricing Policy has three objectives these includes incentives rebalancing to create price competition pathway and innovation; Prioritizing patients affordability and access to prescriptive drugs, and to bring down the prices of medication drugs for comparative effectiveness to all. These goals have been formulated to ensure continued affordability and accessibility of the essential drugs to people (Morgan, Kennedy, Boothe,  McMahon, Watson & Roughead, 2009).  Especially, it was to cater for the citizens of weaker economic backgrounds, including those living below a dollar a day.   They advocate for putting the needs of the patients before the profits.  Improved innovativeness and price competition called for the slaying of the patent laws that some pharmaceutical companies were granted to create a free market.  The provisions of the policy include allowing Medicare to negotiate prices of drugs directly in part D of Medicare. Faster approval of generics to get to the market and finally required manufacturers of prescription drugs to give discounted medications to those with low-income Medicare.

The Prescription Drug Pricing Policy has got many benefits ranging from financial, service to social benefits. The financial benefits are, the policy would be advantageous to the American Citizens as it would make theme save large portions of money. The saved amount would be reinvested back in the country in entrepreneurship activities thus benefiting both the state and the entrepreneur. The social benefits of the Policy are that the consumers who are price sensitive will benefit from the reduced prices of drugs by seeking regular treatments (Frank, 2001).   This would increase the longevity of life in and excitement among families in the USA.  The other benefit lies in the service delivery; if the patent rights are removed due to the policy, then there will be more providers in the market hence provision of better quality medical services and drugs.

The policy is an eligible requirement and policy that had been tried and worked very successfully in India. The government of India implemented the policy to ensure that particular life -saving drugs are made available for the public and to ensure the country has got good healthcare infrastructure.  The state has created the National Pharmaceutical Pricing Authority (NPPA) which controls the prices of prescribed drugs. The body commands the manufacturer where necessary to reduce the costs to the affordable rates that the citizens can manage and also keep on controlling the price of drugs not to exceed the ceiling price.  The NPPA has used the prescribed drug pricing policy to control 348 essential drugs in India (Mueller, 2006). The excessive price control in India has reduced the attractiveness of the pharmaceutical industry. The actions taken by the government of India due to the introduction of prescribed drug pricing policy made the domestic drug manufacturers to produce generic prescribed drugs at very lower costs. This enhanced the affordability and availability of the medicines that used to be expensive before in India’s domestic market. Therefore, from the policy success of in India, it is eligible and can be workable in the USA. The government does the financing of manufacturing companies in India.  To make the policy succeed the government provided subsidies to the pharmaceutical companies to reduce the cost of production. The subsidies contributed to a flat-rate production cost hence increasing the volume and the quality of the drugs produced. The government majorly opted to introduce the prescribed drug pricing because it doesn’t provide insurance covers to the citizens. Hence it was necessary to make the drugs available to the citizens without much struggle.

The administration of the policy is carried out in India by the public. In order to revise and fix the prices of the prescribed drugs, the NPPA evaluates and monitors the prices of the extrapolating drugs and levels them accordingly (Mueller, 2006). The NPPA controls the prices in the market with the help of the Drugs Price Control Order (DPCO) while the DPCO employs market-based strategies to determine and set the ceiling price.  The ceiling price is got by averaging the brand prices which exceeds a market share of 1%. The ceiling price is administered in different ways depending on the number of competitors making a category. If in a category there is only one drug, then to control its price the drug price cap is made the “fixed percent” and the calculation is done according to the DPCO current drug price. The control of the prices of drugs to an affordable rate occasioned by the prescribed pricing policy in India has benefited many people.

The policy has enhanced the high production of medicine that has been used by the Indians as well as other countries to improve their health standards. India exports cheap drugs to other countries like Latin America where the prices of drugs have remained high since time immemorial. This helped in the slight reduction in the costs of drugs in America. India is the 3rd largest drug market for supplying drugs to over 200 countries including developing and developed nations. Indians low prices have enhanced the longevity of lives in most parts of the world including Africa. The policy has impacted positively on the vulnerable groups who suffer from rare diseases but are economically challenged by providing them with generic drugs to cure the harmful diseases. A case study where India has used the low cost prescribed drugs to provide low cost and efficient treatment is at the eyesight facility in Sadguru Netra Chikitsalaya (Patel, Chisholm, Rabe-Hesketh, Dias-Saxena, Andrew & Mann, 2003). An Indian health organization offered cheap surgery to eye cataracts patients and also used cross-subsidization to help the poor rural inhabitants who could not afford the high cost of generic drugs and surgery.  By use of cross-subsidization, they transferred the other pay of the patients who were able to pay the subsidized treatments to the vulnerable poor rural people who could not afford treatment fee.

The strengths of the prescribed drug pricing policy are, it covers a vast number of lives of people with comprehensive benefits at a lower cost. The prescribed drug policy advocates for everyone without any discrimination by wealth, race, ethnicity sex or area of origin.  The other strength is that the policy enhances lower operating margins. The policy comes with some subsidies or incentives from the government as observed in India, to improve production at reduced cost margins. The policy also enhances compliance with the set rules (Mrazek, 2002).  Unlike the ill actions of pharmaceuticals given patent right of production, pricing policy which introduces every manufacturer in the market yields compliance to the principles of production lest they are ousted. The other strength of prescription pricing policy is that it creates production of quality health products. Because of the existence of several producers in the market, every manufacturer strives to produce quality drugs with few side effects to attract more consumers. The weaknesses of the policy are, it might create a tendency where people abuse drugs. If the drugs or the medication is so cheap, even people with mild illnesses will go to shops to buy drugs with no prescription from physicians. The other weakness is the weakening of the country’s economy. It might force the government to spend a lot of money on subsidies to help in high production of drugs to reduce the prices, hence ending up using a large volume of the GDP of the country. The policy might also lead to counterfeits or substandard medicines.  When this policy opens the market, some of the business-oriented companies might engage in the production of counterfeit products devoid of the required elements.

The prescribed drug pricing policy is an essential tool that would improve the drugs adequacy in the market of USA by reducing hoarding and low approvals for the drugs that limit drugs entry into the market. The policy also enhances drug production hence its availability in the market. The effectiveness of the drug is also guaranteed since the policy advocates for the free flow of high-quality generic drugs in the market. This would provide alternatives which replace the expensive medications hence improved livelihood. The effectiveness has been proved by the UK’s Institute of Health and Care Excellence (NICE) which validated the cost-effectiveness of the drugs generated from prescribed pricing drug policy ( Patel, Chisholm, Rabe-Hesketh, Dias-Saxena, Andrew & Man, 2003). It analyzed the cost and the effectiveness of the drugs to human health, on the basis of Quality-Adjusted Life Years (QALY) and found the policy very effective both financially and health-wise.

The policy’s cost-benefit analysis given by Neeraj of Schaeffer Center shows that the benefits of the policy outweigh the costs (Musselwhite, Maciag, Lankowski, Gretes, Wellems, Tavera & Guillen, 2012).  The benefits of the policy are that it helps to share the global expenses on medical innovation which would make the USA government redistribute the burden of research. Neeraj also found out that  20% of what people spend on the medication under this policy are received back as profit in the chain of distribution made up of pharmacist’s, managers, wholesalers, and insurers. The other benefits are it enhances favorable competition among the manufacturers of generic drugs; drugs are worth the value they are bought, and lastly, high-cost service calls for high value. While the only costs noted by Neeraj were that there might be misused by some people but at lower ends and the counterfeit problem.

Before, implementation of the policy the government should address the following issues related to exit of the market due to flooding, transparency in pricing and inappropriate prescriptions in the market. To implement the policy in the USA, the government needs to offer subsidies to the pharmaceutical companies manufacturing the products to lower the price of production. The government should also illegalize deals that limit the generic products from market entry, welcome bilateral deals, advocate for transparency in cost and pricing of the products. The government of the USA should also terminate exclusivity and monopolies and finally enact stronger medical rules to penalize fraud.

The challenge on the best way to implement Drug Price Control Order in India is one of the lessons that needs action, brand promotion and poor packaging that contributed to low acceptability of the drugs by the consumers. The other challenge that is learned from India is the drug tweaking strategies that other companies employed to gain in the market (Jain & Jadhav, 2009).   These actions need prior strategies before implementing the policy and proper monitory during production.  The social workers, therefore, should advocate for the appropriate promotion of the authenticity of the products to the customers so that they accept them in the market.  They should also take the lead in the implementation of the DPCO and keep on assessing, evaluating, and doing follow up on the method of price control to prevent any fraudulent acts by pharmaceutical companies. They should keep on updating the citizens on the recommendable prices of the products and the ceiling price to the drugs. They should also monitor companies that are practicing tweaking, put them on radar or deregister them. Finally, the social worker’s team should move to enlighten the customers on the original packages from the counterfeit to authentic the original products prevent exploitation on the consumers of the medical products.

In conclusion, Prescription Drug Pricing policy is a substantive social policy that needs to be enacted by the government of the United States of America. The prices of prescription drugs in the USA have been a very traumatizing issue with a hike in the costs of this precious life-containing commodity.  The causes of the rise in the price of the prescription drugs being lack of government control, patent rights granted to given pharmaceutical industries, delays in the approval of generic drugs among other causes. The objectives of the policy include but not limited to Prioritizing patients affordability and access health care services and rebalancing to create price competition pathway and innovation. The benefits of the policy include making prescription drugs affordable to all and reducing the superfluous expenses in healthcare. The policy is eligible and has been adopted by countries like India who have remained one the largest distributor of medical products. Therefore, it is a sustainable and beneficial policy that the Government of the USA should adopt to reduce the skyrocketing prices of prescription drugs.

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