Question

New drugs are expensive in the U.S.

For example, there are new pain relievers to treat severe arthritis, but they cost $150 a month, nearly 20 times more than previous pain relievers. A new biotech drug, Enbrel, to treat rheumatoid arthritis can cost $1,500 a month.

Which factors have contributed most to the sharp increase in drug expenditures? Discuss all possible factors. Are rising drug expenditures necessarily bad? And how to control drug costs?

Answer 1

a) The factors that have contributed most to the increase in drug expenditures start with a surge in drug prescription use. The number of prescriptions filled has doubled in just ten years this is due, in part to the growth in the number of aged and the proliferation of insurance coverage for prescription drugs. The growth in private and public insurance coverage for prescription drugs is the second reason. The percentage of the population with some form of third-party payment for prescription drugs has been growing for some time. The rise in drug prices and the changes in the types of drugs prescribed round out the reasons for the increase.

b) Rising drug expenditures is not necessarily bad because they can be viewed favorably when innovative drugs become available to extend life, substitute for more costly treatments, and improve the quality of life.

c) Some steps that can be followed to reduce drug costs are :

• Review the drug formaly of your insurance plan.A drug formulary is a listing of specific prescription drugs in different categories that determines how much you will pay for the medication. Medications are usually grouped in tiers or categories of drugs with similar copayment amounts. Certain medications may not be covered or may require special approval. Take this list with you to each doctor’s appointment to help your doctor select an appropriate medication for your condition at the lowest cost for you.
• Enquiring from pharmacist if low cost generic drug is available.Generic drugs are identical copies of certain branded drugs and are available at low cost. These can be used if the doctor has not specifically prescribed the use of branded drugs only.
• Go for theraupatic substitutes. If your doctor and pharmacist agree that a similar low cost medication is available, based on your insurance plan, then go for it.
• Use of manufacturer coupons. Some branded drug manufacturers offer discount coupons for certain products on their website. Make use of them but be sure to study the guidelines properly.
• Search online for patient assistance programs. Several programs are available to help people with low incomes afford prescription medicines. Check out the following websites with information from each of these organizations: Partnership for Prescription Assistance, RxAssist, and NeedyMeds.
• Price Comparisons Prices of drugs vary from pharmacy to pharmacy. Check from different pharmacies and purchase from where lowest price is offered.

Some of the measures already adopted to reduce drug price are mentioned in this paragraph.Drug companies have had to demonstrate that their drugs are not only therapeutically superior to competing drugs but also cost-effective. Namely that the additional benefits of their drugs are worth its higher price. Prescription drug plan formularies include a tiered set of copayments for a drug, a small copayment for less costly generic versions of the drug and a higher copayment for the branded version. Brand-name drug firms have made coupons available for patients at the physicians’ office, and on their websites to give patients an opportunity to pay the difference in copayment between the generic and branded version. By using coupons, drug firms have been able to undercut insurers’ tiered formularies shifting patients to cheaper generics through the use of different copayments.