Research Paper on Increasing Drug Costs

Causes of the Increase in Drug Prices

Diseases are constantly increasing in the world meaning that the health sector has to constantly fund the research of different drugs, to cure the increasing number of diseases. Since the cost of manufacturing new drugs and conducting the needed research is very high, the health sector has to come up with a way to recover some of the funds that they use in the process. Institutions such as the stem cell research facility in North Carolina require additional funding since the capital the government gives them are not enough (Hoban, 2017). The only way to get the necessary funds is through increasing the costs in the treatments that the center creates, to allow the center to continue conducting their research.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

Another reason why the drug prices are high is that there are middlemen who negotiate the prices at which drugs sell. After manufacturing the drugs, the manufacturers have to be linked with the insurance companies to access the patients that need their products. For manufacturers, patients, and insurance companies interacting, price negotiation has to happen (Howard, Bach, Berndt & Conti, 2015). The price negotiated needs to cover the cost of manufacturing the drugs, and to pay the pharmacy benefit managers. The prices negotiated during the process affects the end price that patients have to pay. The manufacturing companies are unable to influence the price at which their products sell directly.

Government policies can also be held responsible for the increasing cost of drugs. The policies that are passed by the government make it easy for the different pharmaceutical companies to charge high prices on their products. The pharmaceutical companies are allowed to monopolize the market for a period after releasing a drug as a way to reduce the competition in the market. Giving pharmaceutical companies control over the market means they can charge whatever prices they feel for their products with little to no interference from the government. As there is monopoly created, fewer companies create drugs as they may not make it to the market to compete with the already existing drugs (Trogdon, 2018).

The government in North Carolina has created a new bill that hopes to reduce the costs that patients undertake when receiving chemotherapy treatment. Though the government hopes the bill goes far in assisting cancer treatment, it also has additional consequences on the prices of other drugs (Dusetzina, 2016). Once the law passes, companies that deal with drug manufacturing end up losing their chance of negotiating the price at which the insurance companies sell their products. Different insurance companies have the right to change their prices to consumers, therefore end up putting the consumers in a bad position. The new bill will also make it difficult for consumers to access information on the reasons why drug charges are high. The lack of transparency allowed by the new legislation allows the companies to increase the prices of their products without fear of consumer uproar. The patients in North Carolina are expected to continue suffering from high prices, as the government protects the companies.

North Carolina also has a large number of people who need specialty drugs to deal with the type of illnesses that they have. The costs associated with specialty drugs in North Carolina are much higher than those in other states. The high cost affects multiple people in North Carolina and has included in the insurance coverage (Trogdon, 2018). The costs of the specialty treatments are included in most insurance covers; therefore though one does not use the particular drugs, they end up paying for them.

Actions to Take to Reduce the Increasing Drug Costs

As patients need to have access to cheaper drugs in North Carolina, they can take several steps. One is looking for cheaper options on drugs that they require. Pharmacies are allowed and obliged to offer their customers cheaper options on the medication that they purchase. Letting customers learn of cheaper options allows them to reduce the burden of expensive drugs (Maciejewski, Wansink, Lindquist, Parker & Farley, 2014). Customers should also ask their doctors and pharmacists to give them information on which drugs work most efficiently and are the most affordable to the patient (Rao, Abigail & Ahmed, 2018).

Changing the government policies ensures more companies can create drugs to compete with those in the market. Creating more opportunities for drug manufacturing companies in North Carolina paves the way for the creation of more effective drugs, which would, in turn, allow patients to have access to different drugs at different prices (Dusetzina, 2016). The elimination of monopoly in the health sector by creating more drugs in the market allows the issue of high drug pricing to go down.

Patients in North Carolina should also make use of the information made available on social apps, which allows them to compare prices of different drugs provided to them. The information provided makes it easy for different patients to learn of cheaper alternatives to the high priced medication they are given, therefore being cheaper and more affordable to the people of North Carolina. The government should also take the necessary actions to reduce the prices at which drugs sell. The actions taken include changing legislation and making drug manufacturing companies more accountable. Promoting accountability will ensure the companies are unable to hike the prices on drugs without having legitimate reasons (Howard et al., 2015). The national government should also change the laws associated with patenting and creating new drugs. Allowing more companies to create drugs limits the monopoly that already exists among companies thereby reducing the high costs of drugs.

Conclusion

The rampant increase in drug costs in North Carolina has affected the citizens of North Carolina and by extension the health care system in the State. The government should take the necessary measures in reducing the cost of manufacturing and selling drugs to make healthcare more affordable to people in North Carolina.

References

Bill. (2017). Specialty Drugs Grew substantially between 2005 to 2013. Web.

Dusetzina, Stacie B (2016). "Drug Pricing Trends for Orally Administered Anticancer Medications Reimbursed by Commercial Health Plans, 2000-2014." JAMA Oncology 2.7: 960-961. Print.

Hoban, Rose (2017). "NC Medicaid By the Numbers - 2017." North Carolina Health News. N.p., Web. 28 Oct. 2018.

Howard, David H., Peter B. Bach, Ernst R. Berndt, and Rena M. Conti (2015). "Pricing in the Market for Anticancer Drugs." Journal of Economic Perspectives,139-162. Print.

Maciejewski, Matthew L., Daryl Wansink, Jennifer H. Lindquist, John C. Parker, and Joel F. Farley (2014). "Value-Based Insurance Design Program In North Carolina Increased Medication Adherence But Was Not Cost Neutral." Health Affairs 300-308. Print.

Rao, Abigail J., and Ahmed M. Raslan. (2018). "Measuring Value of Health Care: The Importance and Challenges of Measuring True Cost." Quality and Safety in Neurosurgery. pp. 69-78., doi:10.1016/b978-0-12-812898-5.00006-0.

Trogdon, Justin G. (2018). "The Cost of Health Care in North Carolina." North Carolina Medical Journal 79 (1) p.21-25. Print.