Describing the Issue of the Economic Impact of Increasing Prescription Drug Cost
The economic impact of increasing prescription drug costs can affect the health department in general. Not only does it impact the consumers but it also affects: insurance companies, pharmaceutical companies, doctors, and hospitals. Prescription drugs contribute to part of the profit earned by these companies. Many, especially the elderly, depend on prescription drugs to prevent and treat diseases as well as a source to avoid having to spend time in a hospital. “In 2007, 90% of seniors and 58% of non-elderly adults rely on prescription medicine on a regular basis” (Kimbuende, Ranji, & Salganicoff, 2010). Prices for prescription drugs have increased along with the population, which increases the need for such drugs. Brand name drugs were also use to treat certain disease at a higher price than generic drugs. For some of these brand name drugs, advertisement plays an important role. This can result in an increase of the price a consumer might spend on a prescription drug. Manufactures will then patent their product and after such patent expires, they can create generic drugs at a lower price. The increase of price for prescription drugs changes the co pay from, insured paying a fix amount per prescription to paying a fixed percentage of the total prescription price. However, when prices increase for prescription drugs, it calls for the government to be involved in order to regulate pharmaceutical companies but it does not warrant a decrease on the cost for the prescription drugs. As costs increase, so does the price that consumers pay out- of -pocket. Depending on the type of prescription drugs, many insurance companies limit the amount of coverage for such products, increasing the co pay for the consumers and lowering the percentage of consumers that can afford to spend on them.