The High Cost of Prescription Drugs in the US -- Reading Notes: Week 6
Page 859
: After relatively modest growth after the expiration of patents onmanywidely usedmedications from 2010 to 2012, medication expenditures have begun to increase again, - very costly new agents and sharp increases in the prices of some older ones
20% in theUnitedStates Since the advent of the Medicare drug benefit in 2006, government entities have paid for approximately 40% of the nation's total retail prescription drug expenditure
countries
average of $400 for 19 advanced industrialized nations These disparities are reduced but remain substantial even after accounting for undisclosed discounts ("rebates") that manufacturers offer to US payers. increasing drug costs have important clinical implications.
medications, - such increases can reduce the affordability of prescribed regimens and thus patient adherence, leading to negative health outcomes.
Page 860 Brand-Name v. Generic Drugs
: The primary reason for increasing drug spending is the high price of branded products protected by market exclusivity provisions granted by the US Patent and Trademark Office and the Food and Drug Administration (FDA) Although brand-name drugs comprise only 10% of all dispensed prescriptions in the United States, : they account for 72% of drug spending Such high prices have historically been limited to brand-name drugs that treat rare conditions However, drugs that treat conditions affecting millions of individuals in the United States also now have high costs Although brand-name drugs account for the greatest increase in prescription drug expenditures another area that has captured the attention of the public and of policy makers has been the sharp increase in the costs of some older generic drugs The company was able to set the high price despite the absence of any patent protection because no other competing manufacturer was licensed to market the drug
in the United States. Even though the prices of most generic drug products have remained stable between 2008 and 2015, : those of almost 400 increased by more than 1000%.
Sources of High Drug Prices in the US
: Drug prices are higher in the United States than in the rest of the industrialized world because, unlike that in nearly every other advanced nation, the US health care system allows manufacturers to set their own price for a given product : In contrast, in countries with national health insurance systems, : a delegated body negotiates drug prices or rejects coverage of products if the price demanded by the manufacturer is excessive in light of the benefit provided : US drug prices per capita still substantially outpace those in other settings : Drug companies' ability to maintain high prices in the United States is based on 2 market forces o protection from competition and negotiating power
Page 861 Competition in the Pharmaceutical Marketplace
The most important factor that allows manufacturers to set high drug prices for brand. name drugs is market exclusivity o which arises from 2 forms of legal protection against competition Together, these factors generate government-granted monopoly rights f