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03/04/2015

Will the US Ever Control Drug Prices Like the Rest of the World?

Probably
not. It’s just not the American way.

And,
it is true that Americans pay more out-of-pocket for prescription drugs than
citizens in other developed countries. Other nations use government cost controls and aggressive cost containment
strategies to regulate prescription drug costs. Historically, the US Congress has deliberately and consistently refused to
regulate
prescription drug pricing directly.

The
American pharmaceutical industry often has been accused of gouging consumers
and profiteering. Its investor return on equity is usually much higher than
other industries. And prescription drug pricing differentials have always been difficult to
understand, whether at the local pharmacy or within similar hospitals in the
same locale.

Prescription
drug development costs and prescription drug consumer pricing structures are
complex and not transparent. The complexity makes it difficult to explain
simply and rationally to policy makers and consumers; and the lack of
transparency and little government oversight does not engender trust that is a
key factor in improving the industry’s public image. Maybe it’s time for our
government to experiment with some of the strategies that other nations have
used to rein in prescription drug costs?

What
might be some good first steps? Perhaps, the Medicaid programs should be
regionalized rather than operated at the state level? Each state Medicaid
program has its own prescription drug formulary? State geographic boundaries
are arbitrary; naturally, regional maps will be arbitrary too. But with
regionalization there is the possibility of efficiencies with standardization.
After all, the Medicare program is one national program and yet allows for
locality differentiation for hospital and medical care costs.

Perhaps
Medicare should be permitted to bid the price of some drugs in an attempt to
reduce costs as the VA Health System does? Medicare does have a completive bidding process for some durable medical
equipment.

And
perhaps, the government should set prices for some drugs and biologics? Medicare and Medicaid have provider fee schedules. The government sets prices
for some goods and services, why exclude drugs?

But
again, direct price regulation is just not the American way.

The Alden March Bioethics Institute offers a Master of Science in Bioethics, a Doctorate of Professional Studies in Bioethics, and Graduate Certificates in Clinical Ethics and Clinical Ethics Consultation. For more information on AMBI’s online graduate programs, please visit our website. 

 

 

This entry was posted in Health Care, Pharmaceuticals and tagged , , . Posted by Hayley Dittus-Doria. Bookmark the permalink.

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