You might have thought once or twice that your prescription medicine is too expensive. So who is to blame for such high prices? Is the government’s fault? Are the pharmaceutical companies to blame? Who is that I should be sending my medications bill to? Well today we are here to provide a little insight on what exactly is going on and you can decide for yourself to whom belongs the villainy.
Prescription Medicine: Buying Power
In the United States, there are multitudes of consumers of prescription medicine. This type of buying system is very different from a lot of countries. In the United Kingdom there is one organization that buys prescription drugs for the whole country. It is this type of bulk buying that gets them better prices. Because there are limited buyers in other countries, the pharmaceutical sellers have to be more sensitive to how much their customers are willing to pay, particularly if there is only one customer. That sale negotiation will either make or break whether they can be in that market. Our insurance groups and hospitals buy for their individual consumers making it harder for them to negotiate price.
According to law, one of our nation’s largest providers of medication, the government-run Medicare, cannot negotiate price on prescription drugs. Because Medicare is one of the largest buyers of pharmaceuticals, it has the potential to substantially lower prices of those drugs, if and only if, it were able to negotiate. In Germany, nonprofit health insurers are able to bargain with pharmaceuticals and health providers to get the best price possible.
To prove that point, the Veterans Administration (VA) is able to negotiate prices on prescription drugs and receives anywhere from 10% to 20% off of branded and generic drugs. They are only able to do this because they are a closed health care system.
Drug Review Boards
Some countries have a drug review board in their health departments. In Canada, for example, Health Canada (Canada’s healthy ministry) has a drug review board that helps determine not only if a drug does what it says it will do, but how effective it is relative to what is already out on the market. This recommendation helps providers determine a price they are willing to pay for the drug.
When buyers have the power to say no for whatever reason, they can control the prices of the drugs that they need. It’s a quite simple concept actually.
Here To Inform
Whether it’s the fact that Medicare cannot negotiate or that the U.S. doesn’t have a drug review board, there is most definitely a cost problem when it comes to prescription drugs. Arrowhead is not here to put the blame on anyone, we are strictly here to inform. If you think some of this information was useful, we would appreciate a share on your choice of social media!