The Cost of Prescription Drugs In America

Abstract 

America is one of the companies that have a high cost of prescription drugs in the world. This is despite the country being home to most of the world's leading pharmaceutical companies. Lack of regulation and control on costs and the government allowing monopoly by the pharmaceutical companies has been cited as the main reasons for the increase in the costs of prescription drugs. Most of the Americans believe that the government should do something to save the situation, which has hampered their lives for many years. The only way to do this is by having a policy change. 

Defining the Issue (Problem) 

The USA has one of the highest costs of prescription drugs among the developed nations. The amount of spending on prescription drugs per capita in America is higher than in countries such as Britain and Germany. One of the reasons cited for this is the lack of regulation that governs the cost of these drugs in the USA. The government has provided the pharmaceutical companies with the monopoly they need to charge any prices they want as far as the markets accept ( Kesselheim, Avorn, & Sarpatwari, 2016) . Life-saving prescription drugs are some of the most expensive, which takes a toll on the economic aspects of most individuals who require having the drugs. There have been instances where people have skipped drugs due to the costs, which hamper their recovery process. The costs of these drugs are still high in America despite the more drugs being approved today as compared to a few years back ( Kantarjian, & Rajkumar, 2015) . As a result, it creates the necessity to have a policy change to make sure that the lives of Americans are not negatively affected because of the escalating costs of prescription drugs. 

Analyzing Available Data 

Research done on America reveals that the country does not have any policy or procedure in place that can help in lowering the costs of the drugs. Sadly, no laws can help to help prevent the costs of these drugs from escalating ( Kantarjian, & Rajkumar, 2015) . It is possible to have the cost of a drug at $100 per dose this month and to have the same drug costing $600 per dose a month later without having anything done in the process ( Kesselheim, Avorn, & Sarpatwari, 2016) . Therefore, the companies have an opportunity to charge more based on the monopoly that the government has given them. The argument usually developed by pharmaceutical companies is that they incur a high cost to research, develop, as well as bring the drug to the market ( Kantarjian, & Rajkumar, 2015) . The companies purport that they need to cover the costs and make a profit from the sale of the drugs to remain in the business and continue developing innovative prescription medications that can continue saving more lives in the country and beyond ( Alpern, Stauffer, & Kesselheim, 2014) . However, it is also evident that despite the high cost of research and development, pharmaceutical companies are some of the most profitable companies in the country. Therefore, most of the pharmaceutical companies usually spend more on marketing than they do on research. 

Spending on prescription drugs in the USA is higher than that in other high-income countries as evidenced by the high costs paid by consumers and purchasers in the USA ( Alpern, Stauffer, & Kesselheim, 2014) . Moreover, Americans are more likely to bear the high costs of prescription drugs out of the pocket than citizens in other high-income countries ( Kantarjian, & Rajkumar, 2015). Mostly, it has the highest part of the population that is not insured and those insured tend to have fewer benefits as compared to their counterparts in other countries. There have been two periods when the costs of drugs have skyrocketed, that is the 1990s and 2014-15. The two periods have been marked by the release of main drugs in the around the globe ( Alpern, Stauffer, & Kesselheim, 2014) . 

One of the reasons cited by analysts for the high costs of prescription drugs is the lack of any control strategies. Other high-income countries such as Germany and Norway have employed strategies that include the use of centralized price negotiations, comparative and cost-effective research aimed at determining the price ceilings, and the use of national formularies ( Alpern, Stauffer, & Kesselheim, 2014) . The system used in harmonizing the health care delivery and payments in the USA is fragmented. Numerous separate negotiations and discussions exist between drug manufacturers and the payers. Similarly, complex arrangements usually exist between the federal as well as the state health programs. Consequently, in the USA, the government provides monopoly pricing when it comes to the brand-name drugs. 

Recent studies conducted on Americans reveal that most of them believe that the government should be doing more to ensure a reduction in prescription drugs. For instance, about 92% of adults in the country are of the idea that the federal government should negotiate lower drug prices for all those Medicare beneficiaries. The move would be in line with the centralized system that is used in other countries. Despite the need to reduce the high cost of drugs, it is important to note that the high spending recorded in America does not mean it is wasteful ( Alpern, Stauffer, & Kesselheim, 2014) . There is a likelihood of the pharmaceutical sector attracting more investments, which increases the chances of the country enjoying innovative as well as effective drugs. The implication is that the policymakers in the country should weigh on the benefits and the problems created by any cost-control policy they pass. 

Generating Health Policy Alternatives 

The government can implement various policies to ensure that there is a reduction in the costs of prescription drugs in the country. Majority of Americans believe that the government should do more to ensure that Americans are not escalated beyond their means. A considerable number of people who skip prescription drugs cite their costs as the number one reason why they do so. The fact that these drugs are life-saving drugs means that the government must do something to reduce the damaging effects of the high costs. The following are some of the policies that the government can use to deal with the problem. 

The government can take the initiative to negotiate the cost of these drugs for Medicare beneficiaries. This would mainly benefit adults who are the main users of Medicaid ( Kantarjian, & Rajkumar, 2015) . 

The government can also allow the consumers to buy more drugs from foreign countries and allowing the importation of more drugs into the country ( Kantarjian, & Rajkumar, 2015) . 

The US government can also ensure there is transparency in drug pricing across the country ( Tefferi et al., 2015) . 

The government should implement a change in the system to ensure that the US system changes from what the market can bear to how well a drug works. This means that a drug that cures a certain condition will have a higher value than one that only helps in improving the conditions of the disease ( Kantarjian, & Rajkumar, 2015) . 

The other alternative that the government can implement is encouraging the use of generic drugs as is the case in other countries. The use of generic drugs reduces the cost of prescription drugs ( Tefferi et al., 2015) . 

Selecting Decision Criteria 

The success of the country in dealing with the problem of costs depends on the policy that the country selects. Various frameworks can be used by the policymakers in determining if a policy is ideal or not ( Patton, Sawicki, & Clark, 2015) . When selecting a policy, it is important to focus on reliability and validity in which the policy must be easy to measure. The criteria should produce uniform results regardless of who is doing the measurement. A reliable policy is also one that outlines the unit of measurement before it implemented. 

The other criteria are the economic criteria that include the impacts on the economy, the impact the policy has on government spending, and the expected impact on the public sector revenue. Costs act as the main economic criterion and include the direct costs of the policy, tangible costs, and the opportunity costs ( Patton, Sawicki, & Clark, 2015) . It is important to identify the costs completely to minimize surprises down the road. The other economic criterion is benefits that involve an analysis of how the policy actors will benefit off. In most cases, the benefits are measured in the same way as costs. However, it is clear that benefits are more difficult to quantify as compared to the costs. Analysis of the benefits that come from the policy is important in the selection of the right policy. 

The equity criterion is the other major criterion that is used in determining the effectiveness of a policy. A policy may alter equity if it changes the distribution of burdens as well as the benefits in the society ( Vedung, 2017) . Evidently, there are is no right answer for how the society should share burdens and benefits as this is a contentious issue that becomes political at the end ( Patton, Sawicki, & Clark, 2015) . However, the country usually has guidelines for equity such as non-discrimination and equal treatment of those individuals who are situated equally. The country also has different treatment for those who are not equally situated ( Vedung, 2017) . Problems in assessing equity include how the population should be sub-divided, how they should be defined, and definition of the burden, the benefits, and the ability of a group to handle them. 

A policy should also be analyzed based on its technical criteria. The effectiveness of the policy is usually analyzed in regards to the extent to which the policy will help in attaining the goals ( Vedung, 2017) . The other criterion involves a discussion of whether there is technology in place to implement the proposed policy. The most appropriate policy is one in which the technology needed is readily available and one that is cheap. There should also be tests that pertain to the reliability and validity of the policy ( Patton, Sawicki, & Clark, 2015) . In regards to the political criterion, a policy is analyzed based on the extent to which it will be acceptable to various groups such as decision-makers, legislators, administrators, citizens, and union. Besides from acceptability, a policy is also analyzed based on its appropriateness to the values of the society, is it legal under the law, and is it responsive ( Patton, Sawicki, & Clark, 2015). Different agencies are involved in the management of a policy. Therefore, each alternative must be judged against operability and the ease of administration. The evaluation criteria are important to measure and select the best alternatives among the list of policies that can be implemented. The criterions discussed above reveal that costs, the effectiveness of the policy, the net benefit, the efficiency, equity, legality, the ease of administration, as well as, the political acceptability are the most appropriate ways to assess a policy ( Vedung, 2017) . Analyzing the parties involved with the policy ensures that the benefits to various groups are well understood. 

Analyzing and evaluating health policy alternatives 

This step involves the packaging of alternatives into strategies. It is done by looking at how each of the policy benefits the criteria that were analyzed above. It is important to analyze each policy against all the dimensions by using both qualitative and quantitative means in ensuring that the most appropriate policy has been selected for implementation ( Kesselheim, Avorn, & Sarpatwari, 2016) . The efficiency of the policy analysis process usually increases if the various projects or alternatives are analyzed together as compared to when one policy or alternative is analyzed alone. 

The policy requiring the government to discuss or negotiate for prices of various drugs for those using Medicare would be ideal because the government has been implementing it with the veterans department ( Kantarjian, & Rajkumar, 2015) . This policy would in effect benefit those who are from low-income areas who rely on Medicare for coverage. However, negotiations on the costs of drugs between the government and the companies would also leave a large number of people put thanks to the fact that most of the people who are not on the plan ( Kantarjian, Steensma, Rius Sanjuan, Elshaug, & Light, 2014) . Those using private health programs are also left out and will incur the same high cost they have been incurring since the 1990s ( Kesselheim, Avorn, & Sarpatwari, 2016) . A considerable percentage of Americans is not insured under any plan, which means that taking the initiative to discuss costs for the Medicare patients would only be discriminative towards those who are not covered. This policy would not be politically acceptable as Americans would feel it not promote equity in the society as it would only be beneficial to one group of people. 

A decision to allow people to buy drugs from outside the country would be welcome politically as the majority of Americans believe that the federal government should do more in ensuring that the prices are controlled. The policy would mean that American stores could import more drugs from cheaper locations across the globe instead of only relying on supply from the American companies ( Kantarjian, Steensma, Rius Sanjuan, Elshaug, & Light, 2014) . This policy would promote equity as it would make it easier for all people to have access to drugs that they would have otherwise skipped due to the high costs of those drugs manufactured in the USA. 

Transparency in drug pricing is an ideal policy that can enable the country to acquire more information on how the prices are set for various drugs. The move would be politically acceptable as the majority of Americans want something to be done ( Kantarjian, Steensma, Rius Sanjuan, Elshaug, & Light, 2014) . However, the main challenge that is associated with the issue of having transparency is the monopoly that the government gives companies in the market. Evidently, companies are given close to 20 years monopoly in the market before other types of drugs can be released ( Kantarjian, Steensma, Rius Sanjuan, Elshaug, & Light, 2014) . Therefore, the companies may gang up and develop a way of dealing with the issue of pricing. Little is known about the costs incurred by companies in research and development and the development of the drug, which means that the companies still have a way of maintaining the prices high. 

The other alternative relates to using the value-based pricing of drugs where the price should be determined by the effectiveness of the drug in the management of a disease. This policy would not be effective though welcome to some companies. There is a risk of companies manipulating the results of their effectiveness ( Kantarjian, Steensma, Rius Sanjuan, Elshaug, & Light, 2014) . On the same note, some of the drugs used in the management of chronic diseases would remain high as they are effective in prolonging the life of an individual. The thousands of drugs across the country mean that evaluating each drug would not only incur an extra cost but would not reduce the cost of these drugs ( Tefferi et al., 2015) . From an administrative perspective, this policy would also not be ideal, as it is tedious and would require much expertise with little results expected from it. The policy also comes short when it comes to the promotion of equity in the country as some of the drugs would remain expensive despite the intervention. The policy would, therefore, not be ideal for reducing the cost of drugs in the country. 

The other policy that can be implemented by the government is the use of generic drugs. The government would have to reduce the monopoly given to most companies especially after a patent has been registered. Generic drugs have been found to work the same way as the original drugs and help in maintaining relatively fair drug prices in countries such as the UK. This policy would be politically acceptable as Americans are looking at the federal government to look at ways it can use in bringing down the cost of various drugs especially the life-saving drugs ( Tefferi et al., 2015) . The policy makes it easy for people from all social groups to have access to drugs and reduce the number of those skipping drugs for costs reasons. This is also an easy policy to administer as the government usually incurs fewer costs as the policy is solemnly based on legislation and ensuring that the legislation has been put into effect. 

In regards to costs, ensuring a transparent drug pricing procedure would incur the most costs as the government tries to ascertain the price allegations put forward by different companies. This policy is also not easy to administer due to the high number of drugs that are produced in the country ( Kantarjian, Steensma, Rius Sanjuan, Elshaug, & Light, 2014) . Negotiating on behalf of the patients would also incur quite a high price because of the number of personnel required to keep track of what different groups need. It would not also be economical as the government would incur a lot for the sake of just a small part of the population ( Tefferi et al., 2015) . The same applies to the policy on ensuring transparency. Therefore, the government would spend a lot of taxpayer’s money only to achieve little results. 

In regards to allowing drugs from other countries, it would be effective as competition in the market would bring the costs down. Allowing foreign companies sell their drugs in the USA would leave American companies with no choice than to reduce the costs for them to remain in business ( Kantarjian, Steensma, Rius Sanjuan, Elshaug, & Light, 2014) . However, despite the policy being ideal for the American population, it would face much opposition from the pharmaceutical companies. The argument would be that the country incurs indirect costs because of allowing foreign companies to sell into the country ( Tefferi et al., 2015) . If these companies are unable to compete, they will close business leading to lost jobs for the American population. The companies would also argue that there would be reduced incentives to produce quality goods and drugs in the process as companies’ only aim would be to compete with foreign companies that probably receive incentives from their governments. 

Companies in the USA have been found to use patents to acquire advantage of the market. The monopoly provided by the government means that the companies will continue dominating the market unless something is done ( Tefferi et al., 2015) . The government should reduce the time spent before a generic drug is allowed for just a few years. It would also mean that the companies do not have a chance to continue using the patent loophole to maintain a high price of its drugs. The policy is effective and promotes equity while also reducing the cost incurred by the government in implementation. 

Selecting the Preferred Alternative 

The most preferred policy relates to promoting the use of generic drugs among individuals by having a change in legislation in the country. The current policy is such that the government provides the companies with a monopoly over the market through the provision of patents. The new legislation should reduce the monopoly to just a few years and encourage companies to come up generic drugs after the period is over. This would drastically reduce the high cost of certain drugs as has been found to be the case in UK and Germany. Moreover, having a change in policy will also encourage more companies from abroad to invest in the American markets. Therefore, the government should combine the policy of having more foreign drugs into the US market while also encouraging the manufacture and use of generic options if the drugs are too expensive. 

Developing an Action/Implementation Plan 

This plan is for the implementation of a policy to encourage the use generic prescription drugs in the country and to encourage more foreign companies to export their products into the country to increase competition that will bring down the cost of prescription drugs. The policy is for the public who are the main users of the drugs made by American pharmaceutical companies. 

The stakeholders of the policy are the American people under their representation in Congress, the federal government, and the pharmaceutical companies ( Hill, 2014) . The American people want to have access to quality drugs but at a lower price as compared to the ones that they get them today. The federal government has the mandate to protect the interests of the American people, which mean that it will always look to enact laws that protect its citizens from any exploitation. The pharmaceutical companies are in the business to make a profit, which means they will be affected by any policy that increases the inflow of foreign drugs and generic components into the country. The policy has to put into consideration the inputs from all the three stakeholders to ensure success. The policy amendment should come into effect in about one year by March 2019 when all the affected parties are expected to comply. 

The potential barriers to successful implementation are the lack of support in the bill from Congress. Opposition to the bill may hinder its implementation making it hard for the government to take measures to curb the high costs. The pharmaceutical companies in the country may sponsor motions in Congress against such a bill. The best approach is to have bipartisan thoughts on the matter to make sure that both sides of the divide are respected and represented in the new bill. The other hindrance to implementation is the timeline set for the implementation of different clauses. The government may delay in coming up with the right measures to ensure that each clause is implemented at the right time. The solution to this is to have a policy implementation team that reports directly to the Health Secretary at each stage in the implementation process. 

This policy has an impact on other policies as it changes some of the laws that have to lead to lack of control strategies in regards to the cost of drugs. For example, this policy changes the age-old policy on patents by reducing the monopoly of most companies in the sector. The policy allows the production of generic drugs in the country with the aim of ensuring that most people can have access to life-saving drugs. The policy also aims at reducing the customs duty levied on foreign companies that intend to export into the USA. The implication is that different departments will have to work together to ensure a smooth implementation process of the policy. 

The policy will start with Congress enacting a law reducing the monopoly that the federal government has given pharmaceutical companies for a long time. This law should be taken to Congress and passed with the president asserting it into law after it has been passed. This will mark the start of the implementation process ( Hill, 2014) . The government will require engaging the pharmaceutical companies on the prospect of reducing the number of years they have been enjoying a monopoly. The legislation should also set up a fund for research and development to ensure that the new policy does not reduce the quality of drugs produced for consumption by the companies. The policy should take one year to implement starting with the company allowing imports from other countries. This will come into effect by 2019. The reduction of monopoly should take the next five years after which it will be reduced to just six years after the patent has been registered. However, any new patent that is being signed from the time the bill become law will be required to fit within the six-year limit set up in the legislation. 

After the policy has been implemented, it is important to monitor the progress and report if the policy is effective or not. This will require looking at the changes in expenditure per capita for prescription drugs and compare that with previous years before the implementation of the plan ( Hill, 2014) . The overall price of the drugs can also be an indicator of the success of the policy if the prices have stagnated or reduced. The other indicator would be a reduction in the number of people who are skipping drugs because of the high costs. Monitoring should be done every six months and the team reporting to the federal government with recommendations on averting any rising problem. 

Conclusion 

The country is presently dealing with the high costs of prescription drugs. This has created the need for the government to come up with a solution that can benefit everyone and not only a few individuals. The number of people who are currently skipping drugs due to their costs is high, which means a considerable number of people are on the verge of losing their lives as a result of something that would have been avoided. It is unethical for pharmaceutical companies to make a lot of profit over the suffering of Americans. One of the ways this can end is by allowing foreign companies to sell their prescription drugs into the country. Besides the use of generic drugs, the country will be able to stagnate the prices and reduce them because of prices. 

References 

Alpern, J. D., Stauffer, W. M., & Kesselheim, A. S. (2014). High-cost generic drugs—implications for patients and policymakers.  New England Journal of Medicine ,  371 (20), 1859-1862. 

Hill, M. (2014).  Policy process: A reader . Routledge. 

Kantarjian, H., & Rajkumar, S. V. (2015, April). Why are cancer drugs so expensive in the United States, and what are the solutions?. In  Mayo Clinic Proceedings  (Vol. 90, No. 4, pp. 500-504). Elsevier. 

Kantarjian, H., Steensma, D., Rius Sanjuan, J., Elshaug, A., & Light, D. (2014). High cancer drug prices in the United States: reasons and proposed solutions.  Journal of oncology practice ,  10 (4), e208-e211. 

Kesselheim, A. S., Avorn, J., & Sarpatwari, A. (2016). The high cost of prescription drugs in the United States: origins and prospects for reform.  Jama ,  316 (8), 858-871. 

Patton, C., Sawicki, D., & Clark, J. (2015).  Basic methods of policy analysis and planning . London: Routledge. 

Tefferi, A., Kantarjian, H., Rajkumar, S. V., Baker, L. H., Abkowitz, J. L., Adamson, J. W., ... & Bennett, J. M. (2015, August). In support of a patient-driven initiative and petition to lower the high price of cancer drugs. In  Mayo Clinic Proceedings  (Vol. 90, No. 8, pp. 996-1000). Elsevier. 

Vedung, E. (2017).  Public policy and program evaluation . London: Routledge.