The rising cost of healthcare has been a hot topic of discussion as of late throughout the United States, with many presidential candidates using it as a selling point of their campaign.
The rising cost of healthcare has been a hot topic of discussion as of late throughout the United States, with many presidential candidates using it as a selling point of their campaign. The problem has gotten so bad within the past few years that the US currently pays more per capita for prescription drugs than any other country in the world.
This is obviously a huge concern for patients and insurance providers alike. Most recently, companies in the US have been putting their employee healthcare plans together for the next year and are predicting a four-year high in their healthcare costs thanks to the rising cost of prescription drugs.
However, while there is objectively a problem, there is still much debate regarding the source of these rising prices as well as how to best combat them.
The Problem
Like with most things in the world of healthcare, the rising cost of prescription medications doesn’t have any one, singular root cause but instead several different causes that add up to one big problem.
One such cause that many people are placing the blame upon is the introduction of expensive new specialty drugs that are more complex than other medications that have come before them and, thus, are more expensive to research and develop.
However, a study that was released in January of this year determined that it wasn’t the cost of innovating new medications that were causing the overall cost of drugs to increase, but rather, it was the manufacturing companies themselves hiking up the prices of the drugs over time. The study shows that drugs that have already been on the market for years were having their prices steadily increased every year, with the best example of this being insulin.
Is it possible that both expensive innovation, as well as price hikes, have contributed to the rising drug costs in the US? This is the most likely case, but the study done seems to indicate that drug manufacturers raising the prices of their medication has a bigger impact than the cost of new drug development overall.
On top of this, a few politicians and those in the media have blamed the rising drug costs on the fact that Medicare is unable to negotiate with companies regarding the price it pays for medication.
Put all of this together and you’ve got a recipe for some very expensive medications that will only continue to become ever more expensive unless something is done.
Potential Solutions
Just as there are a number of different potential causes for the rising cost of medications, there are also several different proposed solutions to the problem.
Allowing the federal government to negotiate the price of drugs for those receiving Medicare is one such solution that has been supported by many politicians already. However, this would only be beneficial for Medicare recipients and wouldn’t help those without insurance or companies paying for their employee’s healthcare plans.
Another solution that is being put forward by Senator and presidential hopeful Bernie Sanders would disallow pharmaceutical companies from paying competitors to keep their cheaper substitutes off the market as well as make it easier to import cheaper medications from Canada. The latter of which also has the support of President Trump. In addition, this solution would force drugmakers to detail their costs of research and development, which would increase the amount of transparency regarding the cost of medication.
Many other lawmakers have put forward potential solutions as well.
Senators Kamala Harris, Dick Durbin, Tina Smith, Amy Klobuchar, and Richard Blumenthal introduced a bill that would reduce the monopoly period for medications if the prices of said medications are significantly increased. This means that if a pharmaceutical company were to hike up the price of one of their medications, then this would allow other companies to bring cheaper generic versions to market.
While it remains to be seen which, if any, of these proposed plans will help reduce the ever-increasing cost of drugs, it’s now more apparent than ever that this is a topic that concerns nearly everyone in America. From the average person paying for their own medication, to politicians and CEOs of large companies, and to the President himself, it’s clear that this is a problem, and something needs to be done about it.
