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cost of medicines

Discussion in 'Pre-Medical - MD' started by medical22, Sep 7, 2002.

  1. medical22

    medical22 Senior Member
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    Do you see the cost of medicines as an important issue the medical profession will face in the future? I would like your opinion on this and would also like more information on the topic. I've heard people say that the elderly cannot afford medicines, is that because they are not fully covered here in the US? Doesn't the high cost also affect other patients. Is this also an issue in other countries?

    Do you think the costs should be reduced? And if so, how can the country do that?

    Thank you.
     
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  3. FutureM.D.

    FutureM.D. Psychology major
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    I think the medicines ARE to exspensive for those who don't have insurance, or those with horrible insurance policies. Prices should be cut.
     
  4. tryingagain

    tryingagain Soon to have no life
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    In my opinion (and I work in orthopaedic sales) I think that prescription drugs are, of course, a major culprit; especially with the elderly.

    Only recently have prescription drug companies been allowed to directly advertise to the patient. Now you cannot watch TV or pick up a magazine without being bombarded by their ads. The biggest problem with this (other than the patient demanding the particular drug they saw in an ad) is that our country does not regulate the amount of money they can spend in their advertising. Capitalism at its best.

    In comparison, many European countries "cap" the amount of spending that the companies can spend on marketing (advertising, hiring drug reps, free trips, etc). However, here in the land of the free we do not. The result: drug companies are spending an average of 19% of their revenue on marketing!!! 19%!!!

    Let's put that into perspective: The next largest percentage of marketing in the US by a major corporation is about 9%. So drug companies spend twice as much as anyone else in marketing.

    What's the result of all of this - much higher drug prices. In fact, the most expensive in the world. The drug companies have to make up this money and do so by making their drugs very expensive.

    If the government would regulate the amount that could be spent in marketing they could also force the price of drugs down. Also, I find it disturbing that these companies are allowed to try and brain wash the patient with these ads. Often times I feel it is the physician's responsibility to decide what drugs are worthy and then recommend these drugs. With the current state of advertising this is not the case.

    Of course to many this sounds like socialist medicine and tampering with the corporation. However, sometimes we must do what is best for the patient and the system.

    Of course politicians would not like to change the laws because they know that the drug companies have very deep pockets.
     
  5. CD

    CD Senior Member
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    Medicines ARE expensive! Even with medical coverage they are a burden not just to the elderly but to anyone who takes ongoing medications. My 10 year old takes two (actually three but the other we receive free from his doctor) which AFTER insurance run us around $100 a month. Not an enormous amount but enough to be felt by our budget. Having said this my opinion may surprise you. Much of the cost of medications is due to the research that led to their discovery. Shouldn't the manufacturer be allowed to make money off of their investment? Many of the drugs that a manufacturer works on never reach the public and their money is lost. Therefore those products that do reach the market are "overpriced" to compensate for the "fruitless" ones. This is the reason for the 10 year restriction on generic drugs....to allow the manufacturer to recoupe some of their money. If drug companies are not allowed to make a profit, then research will slow or stop all together and in the end more people will suffer or die who could have been saved by additional research. Personally I am thankful for the research that has brought the medications that extend my sons life. I don't begrudge the manufacturer for their profit. I am not "owed" medication. The opportunity to have drugs availiable is a privelege, not a right. Most other countries would give anything to have the availiability of drugs that we have. There are programs around to help the elderly and others who truly need medications. (Our state has a great program) Perhaps the bigger problem is the uninsured. Now that's a problem......
     
  6. tryingagain

    tryingagain Soon to have no life
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    I disagree with part of your post. Other developed countries DO have the same medicines that we have but at cheaper costs. Our problem is that we are a country that strives on capitalism and the government seems to protect the corporations.

    I work in sales and I see the amount of money that drug companies spend on marketing their end product. Frankly, it is disgusting. While it is true that drugs do cost a lot to research, it is also true that companies such as Pfizer and Merck retire more millionaire employees than any other company on the planet. They are simply making a ton of money, and a ton of profit.

    If the drug compaines would actually lower their prices or allow their drugs to be covered by medicare they could increase their sales volume and possibly break even. I do have a problem with the pharmaceutical companies in "their profit". They, like much of the US healthcare system, are simply too greedy. They will fight for every penny as a company and they will fight for every penny with our Congress.

    Yes, the drugs these companies provide to us have greatly improved our quality of life. However there are those patients out there who are in desperate need of these drugs and can't afford them. Just think of how many lives (or improved quality of life) the drug companies could save if they would decrease their profit margin or marketing by even 1%. A million elderly and uninsured lives? 10 million? We will never know.

    Stats Taken From: As Sick As It Gets by Rudolph Mueller, MD

    "The Cost of American Healthcare vs. the average of nine comparison nations showed escess which could be reduced by a national policy:"
    Excess marketing in Pharmaceuticals: 10.9 BILLION DOLLARS
    American Pricing of Pharmaceuticals: 13.7 BILLION DOLLARS

    "Prices Paid To Drug Makers: US Price % Above other Nations' Prices"
    Italy 92.0%
    France 74.4%
    Canada 58.1%
    United Kingdom 52.3%
    Germany 43.9%
     
  7. Random Access

    Random Access 1K Member
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    There are also the sneaky patents that raise the cost of medicine. After seeing Eli Lilly's stock crash when Prozac went generic, drug companies have been desperately patenting their drugs in an interesting manner. The difference between Claritin and Clarinex? Clarinex is only the active stereoisomer of Claritin. Same with Prilosec/Nexium and Celexa/Lexapro, among others.

    The companies market these "new" "improved" drugs (which adds to cost with all the commercials) and also price them slightly below the old drug. People switch over because the new drugs are cheaper and also because doctors tell them to do so, but when the patent protection ends on the old drug, people will still be paying much higher prices for the new patented drug, because doctors keep telling them it's better (since many are courted by drug companies to do so).

    Claritin sales were almost $2 billion last year (!), so I can see why they have essentially extended its patent.

    The drug companies do claim that the new drugs are stronger because the dose is smaller. Of course, the dose is cut in half, because you have only the active part. The one possible exception is that supposedly 10 mg of Lexapro is as effective as 40 mg of Celexa, but one Danish lab disagrees.

    Of course, there's the flip side. Making drugs is expensive, especially given all the trials and such. And a very low percentage of drugs ever make it. R&D costs are amazingly high for drug companies. They rely on huge sellers like those mentioned above to stay alive and hopefully save more lives.

    But I did read a statistic that about 85% of all drugs approved in the last few years were actually just reformulations of old drugs. I guess R&D doesn't produce as much innovation as we thought. But as mentioned, these companies are in it for the money. I'd really like to know how much of net receipts goes back into R&D.

    This interview with Dr. Sharon Levine is interesting: http://abcnews.go.com/sections/community/DailyNews/chat_pharmaceuticals020530.html

    The other thing is that a lot of public funding from the NIH goes into many drugs. The companies that receive this funding can patent the drug. This is a passage from the Peter Jennings link on the above URL (there's also an anecdote about what Bristol-Myers Squibb did with BuSpar that was sort of sneaky):

    "And how important is this publicly funded research to the industry? The NIH looked at the five top-selling drugs of 1995 in a report. It found that 'NIH-funded research played a critical role' in discovering each one of those drugs. "


    -RA
     
  8. cabruen

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    The rising tensions among purchasers, insurers, and providers spilled over to engulf health care's major supplier: the pharmaceutical industry. In 1988, prescription drugs accounted for 5.5% of national health expenditures and were increasing at 8.5% annually, slower than the over-all increase in health expenditures (Levit et al, 1990). With 71% of drug costs borne out-of-pocket by individuals and only 18% paid by private insurance plans, these costs had little impact on insurers.

    In contrast, by 1999 prescription drug costs had risen to 8.3% of total health expenditures and were inflating by 17% per year, triple the rate of growth of health care expenditures as a whole. Moreover, with private insurers-especially HMOs-providing far more prescription drug coverage than previously, insurance plans paid for 43% of drug costs (Iglehart, 2001; Heftier, 2001). Pharmaceutical costs were a major factor in the tailspin of HMO profitability and the bankruptcy of many physician groups in the late I 990s (Bodenheimer, 2000). For automaker Chrysler, spending for employees' prescriptions rose 86% from 1993 to 1998, and drug costs consumed 19% of Ford Motor Company's employee health costs. At Blue Cross and Blue Shield of Michigan, drug costs represented 28% of total expenditures, more than the amount spent on physician visits (Tanouye, 1998). In addition, since 12 million Medicare beneficiaries had no prescription drug coverage and millions with coverage had yearly limits of $500 or $1000, the rapidly growing cost of pharmaceuticals for the elderly catapulted into a major national issue. The pharmaceutical industry was becoming public enemy number one (Harris, 2001).

    For years, drug companies have been the most profitable industry in the United States, earning a 1999 net-profit after taxes equal to 19% of revenues, compared with 5% for all Fortune 500 firms. The pharmaceutical industry claims that drug prices are justified by its expenditures on research and development of new drugs. In fact, R&D for the largest drug companies consumed only 11% of sales in 1998 while marketing and administration accounted for 34% and profits 24% (Kreling et al, 2000).

    In many ways, the pharmaceutical industry has been protected from both price competition and price regulation, virtually assuring high prices and high profits. Unlike many nations, government in the United States does not impose regulated prices on drugs. Government regulations in the United States serve mainly to reduce competition through a system of patent protection. The company developing a new brand-name drug enjoys a patent for 20 years from the date the patent application is filed, during which time no other company can produce the same drug. Once the patent expires, generic drug manufacturers can compete, and do so by selling the same product at far lower prices. For example, in 1999 the brand-name anti-ulcer drug Tagamet cost $2.77 per day, compared with 36 cents per day for the identical generic form, cimetidine (Kreling et al, 2000).

    A number of drug companies have waged expensive legal battles to delay patent expirations on their brand name products, or have paid generic drug manufacturers not to marker generic alternatives (Stolberg and Gerth, 2000, Hall, 2001). In addition, the industry attempts to persuade physicians and patients to use brand-name products, spending over $8 billion in 1998 on sales representatives visits to physicians, journal advertising, sponsorships or professional meetings, and direct-to-consumer television ads (Kreling et al, 2000). Clearly, the 1990's purchaser dominance over health care did not extend to the pharmaceutical sector, where suppliers reigned supreme.
     
  9. mamadoc

    mamadoc Old Member
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    We (meaning everyone - professionals, consumers, media) tend to think of the "cost of prescription drugs" problem as an entity unto itself. There's more to think about, though. I take a drug that costs $1000/mo (fortunately I have insurance!). It has halted the progression of a chronic disease that might otherwise lead to my total disability. So, instead of becoming a Medicaid recipient, unable to work, receiving SSI benefits, I will become a physician, earning a decent salary, paying taxes, PAYING into social security.

    I have never seen an article that addresses the possibility that increased costs in prescription drugs might actually lower the amounts paid out in disability insurance, or increase revenues through taxes paid by people who would otherwise be unable to work. I presume someone out there is crunching those numbers, but it's just one more thing to think about.
     
  10. CD

    CD Senior Member
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    Not all you hear on the news is trustworthy. After hearing a news segment telling how a medication (sorry I don't remember the exact medication) costs nearly $80 in the U.S. but only $15 elsewhere, I contacted a friend of mine in the pharaceutical business and questioned him. He sighed and said that it was "true but inaccurate" because the drug was originally marketed in the U.S. so it was here that the costs were to be recouped. AFter it was assured that the costs involved would be recovered, the drug was made availiable at a reduced cost elsewhere. The cost of $15 did cover the manufacturer costs and allow a little profit but not the other costs involved in it's development. It may not seem fair, but THATS GOOD BUSINESS.

    AS for the advertising expenditures. A study done last year (I don't have the study in front of me but read it on Medscape) showed that med STUDENTS who were given pens, mugs, etc., that had specific drugs on them DID INDEED increase the number of prescriptions prescribed for that particular drug by that physician once he/she entered the workforce. THAT'S GOOD BUSINESS for the manufacturer, although it isn't good medicine. Ultimately the choice of medication lies with the patient and his/her physician. Perhaps an additional problem is the fact that doctors allow themselves to be swayed by pharaceutical companies by something so simple as "free-bies"


    The same freedoms (for the most part capitalism) that allow drug companies to run the way they do also allow us (the patient) the freedom to choose. WE, (unlike so many other countries), have the freedom to choose which physician we choose to see, what treatment we wish to undergo, and what medications we wish to use. Few other systems of health care allow such choice. On a personal note, within two months time after my son was diagnosed, I located a physician willing to try to treat my son, formulated my own treatment plan, and chose the medications that I beleived might prolong my sons life (actually his new physician chose the medication because I felt there were several which seemed equal in their mechanism of action). Very few, if any, other systems of health care allow the patient such freedoms to attempt untried and unproven treatments. (By the way, it appears as if the treatment is working for my son....time will tell). Ours isn't a perfect system, but it is a good one.
     
  11. cmspilot

    cmspilot Junior Member
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    That is just it... our system is not perfect, but it is the best one around. Tell me a country where you can receive more innovative healthcare. The United States, and its capitalism system, promotes innovation for one simple reason: profit motive. The effects of a socialist healthcare system (which some of you are certainly leaning towards) are clearly the loss of incentive by these companies to research and develop new life saving drugs.
     
  12. CD

    CD Senior Member
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    cmspilot-- well said.
     

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