World Health Organization
Drug Affordability
As healthcare costs continue to climb around the world, ensuring patient access to
lifesaving medications is a growing issue for populations which are finding it increasingly to
afford the latest prescription drugs being released to market. This becomes an even greater issue
for individuals suffering from rare diseases where generic prescriptions are non-existent and the
only options for treatment tend to come in the form of highly expensive name brand medications
which can cost as much as four hundred thousand dollars for a year’s supply. Although some
corporations may provide these medications free of charge to uninsured or disadvantaged
patients, insurance companies and state healthcare systems are often left with no option but to
pay these exorbitant prices. The situation however becomes less clear when looking at newly
released medications for more common diseases and conditions which often boast improvements
in treatment effectiveness yet come at a cost many times more expensive than cheaper generic
medications.
The Causes of High Costs
In nations without price controls, such as the United States, name brand drugs are
extremely expensive due to a variety of factors. While the cost of manufacturing prescription
medications is extremely low, research and development in addition to clinical trials can require
hundreds of millions of dollars to bring a new drug to market. Included in the cost is marketing
not only for the specific medication but other drugs produced by pharmaceutical companies.
Even with these costs, pharmaceuticals remain one of the most profitable businesses in the world
with returns on investment approaching 20%. It is important, however, to note the potential
savings which prescriptions can offer over other forms of treatment; Even the most expensive
prescription drugs can sometimes still cost less than hospitalization or inpatient treatments, or
can increase the effectiveness of these treatments to reduce either the potential for reoccurrence
of a disease or condition. Additionally, potential impacts of price control on funding research and
development must be considered when looking at the implementation of price controls.
However, patents on these medications generally only last for a certain period of time (generally
around twenty years in the west) after which the drug becomes what is known as a generic
medication which any company may manufacture and sell.
Improving Access and Lowering Costs
In order to make sure individuals get the medications they need, nations have a variety of
options to attempt and approach the issue of drug affordability. Many developed countries have
created public healthcare systems which provide subsidies to citizens to purchase branded
medications with some mandating the use of generic medications where available in order to
reduce costs. Some nations have even gone as far to ban direct-marketing of prescription drugs to
consumers under the context that patients will request specific branded drugs and which many
hospitals can’t deny due to ethical reasons. Additionally, many nations have instituted price
controls which may limit how much profit a pharmaceutical company may make on a drug in an
attempt to reduce the costs to just above what it takes to develop and produce them. Advocates
have also called for the reform of pharmaceutical patent law, suggesting that governments could
reduce the period of exclusivity manufactures enjoy and let patented medications become generic
sooner. Abroad, the United Nations and other organizations help to provide lifesaving
medications to disadvantaged populations in the world’s least developed countries, one of the
most notable being the Joint UN Programme on HIV/AIDS which helps fight AIDS abroad and
provides testing and medication in some of the poorest regions on the planet. Partnerships with
the private industry can also help alleviate this issue, encouraging the donation of prescription
medications abroad by pharmaceutical companies.
Questions to Consider:
1) How do your citizens access prescription medications? Does your nation have a public
healthcare system in place or do private insurance companies pay the cost for
medications?
2) Are there price controls on branded drugs in place in your country? How much do your
domestic companies tend to spend on marketing compared to research & development?
3) Is your nation able to lower the cost of medications without significantly harming its
domestic pharmaceutical industry?
4) Can your nation help contribute to international programs intended to increase access to
vital medications for disadvantaged populations around the globe.
For More Information:
http://www.who.int /
http://www.fda.gov/
http://europa.eu/eu-life/healthcare/index_en.htm
http://www.npaf.org/news/Healthcare-Reform-and-Access-to-Prescription-Medications