Pressing Economic Issue: Analyzing Drug Pricing in the U.S.
Overview
In this assignment, you select and research what you believe to be the most important and pressing economic issue that confronts the United States in the health care industry today, and potential ways in which to mitigate the issue. Consider the economic effects of the issue on the health care industry, strategies to address the issue, and best practices for implementing the strategies. You will write a paper to formulate strategies and the application of best practices from other countries based on your research to address a selected economic issue confronting the U.S. health care industry.
Instructions
Provide a review of the selected issue in a 4-5 page paper in which you:
Develop a detailed description of the selected issue and the research process conducted.
Analyze the most significant economic effects of the researched issue on the health care industry supported with at least two examples of the economic effects.
Formulate specific strategies that relevant entities/stakeholders may use to address the selected issue from an economic perspective supported with a rationale for the strategy.
Develop a strategic manner in which the United States can apply economic best practices from other countries to support the strategies for addressing the issue.
Critique the likelihood of the government and the private sector to effectively address the issue.
Use at least three sources to support your writing. Choose sources that are credible, relevant, and appropriate. Cite each source listed on your source page at least one time within your assignment.
Week 10 Assignment - Analyzing Drug Pricing in the U.S.
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Week 10 Assignment - Analyzing Drug Pricing in the U.S.
Drug pricing in the United States has remained a divisive discourse among healthcare players, legislators, pharmaceutical, and other stakeholders. While some parties consider the pricing issue unbearable and threaten access to appropriate care by the patients, others consider the current prices appropriate, citing diverse arguments supporting the status quo. Rajkumar (2020) indicates that the prices of prescription medications in the nation have remained relatively higher compared to other developed nations. The author notes that the mechanisms used by the corporations to set prices are worrying because drugs in the country continue to skyrocket, unlike in other states. These concerns have triggered diverse reactions from the public and their representatives since they are the most affected when struggling to meet the cost of healthcare. As a result, investigating the drug pricing challenge in the U.S. is critical to identify its impact on the healthcare industry, determining the appropriate strategies for addressing the issue, and evaluating the willingness of the government and private sector to implement the solutions.
Description of the Issue
Spending on prescription drugs in the United States is the highest globally, making it challenging for patients to receive desired care. According to Rajkumar (2020), in 2020, the nation’s spending in this area was as high as $350 billion, with projections indicating that the country’s expenditure will continue to increase at an average rate of 3 to 6%. One of the leading causes for this issue is that the U.S. federal government refrains from extensively meddling in regulating drug prices within its boundaries. Instead, the administration allows the market forces to determine the pricing of prescription drugs. This non-intrusive tendency has created a scenario where dominant corporations gradually increase the prices of emerging drugs, leading to the current crisis in the healthcare market. Besides failing to control the prices of medications actively, the government further complicates the pricing situation by integrating regulations that make it difficult for purchases such as Medicare to negotiate favorable prices. For instance, Rajkumar (2020) indicates that existing legislation prohibits Medicare from negotiating directly with drug companies, leading to excessive expenses of up to $14.4 billion when paying for the country’s leading 50 prescribed oral medications. These extra expenditures significantly impact the quality of care and healthcare outcomes in the nation.
Effect on the Healthcare Industry
The effects of unregulated and constantly increasing prescription medication prices are widespread in the healthcare sector. A significant number of Americans, 25%, find the increasing prices unrealistic and unreasonable (Rajkumar (2020). As a result, most end up suffering from the inability to purchase prescribed medication or delays as they search for additional funds to meet the high prices. For example, trends support patients’ perceptions because the last 20 years have seen spending on medications rise by over 330% in the United States (Kirzinger et al., 2019). While the government’s budget continues to become stretched by the higher profits from the manufacturers, the patients suffer from inadequate access to critical drugs for their care. For instance, Kirzinger et al. (2019) illustrate that 3 out of 10 patients could not take their medications because they could not afford the current costs. As a result, this problem leads to cutting their pills in half, substituting them with other cheap drugs purchased over the counter, or skipping doses. Such a trend leads to poor health outcomes among the patients. ...