Medication costs

Medication costs can be the selling price from the manufacturer, that price together with shipping, the wholesale price, the retail price, and the dispensed price. The dispensed price or prescription cost is defined as a cost which the patient has to pay to get medicines or treatments which are written as directions on prescription by a prescribers. The cost is generally influenced by a financial relationship between pharmaceutical manufacturers, wholesale distributors and pharmacies. In addition to the financial relationship, each nation has different systems to control the cost of prescriptions. In the United States, a pharmacy benefit manager, a third-party organization, such as private insurances or government-run health insurances will implement cost containment programs, such as establishing a formulary, to contain the cost.  In the United Kingdom, the government negotiates an overall cap on drugs bill growth with the pharmaceutical industry. In addition a government agency, the National Institute of Health and Care Excellence (NICE) assesses cost effectiveness of individual prescription drugs pricing. The National Health Service also may negotiate direct with individual pharmaceutical companies for certain specialised medicines, as well as running competitive procurements for generic drugs and for patented medicines where there is more than one drug available for a condition. Prescription costs are a regular health care cost for the sick and may mean economic hardship for the underprivileged. With healthcare insurance, the patient in the U.S. pays a co-pay (the amount the patient must pay for each drug or medical visit), a deductible (the amount the patient has to pay before the insurance starts sharing the cost) and co-insurance (the amount the patient has to pay after deductible) for prescription costs. After reaching the out of pocket maximum, the insurance company will pay 100% of the prescription cost. The amount the patient has to pay depends on the healthcare insurance plan the patient has. As of 2017, prescription costs range from just more than 15% in high income countries to 25% in lower-middle income countries and low income countries. == Factors ==

Pricing any pharmaceutical drug for sale to the general public is daunting. Per Forbes, setting a high ceiling price for a new drug could be problematic as physicians could shy away from prescribing the drug, because the cost could be too great for the benefit. Setting too low of a price could imply inferiority, that the drug is too "weak" for the market. Research and development Much research, needed to create drugs is done by the public sector. In addition, pharmaceutical companies also do much research prior to producing medications. The table shows research and development statistics for pharmaceutical companies as of 2013 per Astra Zeneca. Severin Schwan, the CEO of the Swiss company Roche, reported in 2012 that Roche's research and development costs in 2014 amounted to $8.4 billion, a quarter of the entire National Institutes of Health budget. Pharmaceutical companies spend a large amount on research and development before a drug is released to the market and costs can be further divided into three major fields: the discovery into the drug's specific medical field, clinical trials, and failed drugs. Discovery The process of drug discovery can involve scientists determining the antibodies, viruses, or bacteria that cause a specific disease or illness. The time frame can range from 3–20 years and costs can range between several million to tens of millions of dollars. Research teams attempt to break down disease components to find abnormal events/processes taking place in the body. • Phase 1 lasts several months and aims to assess the safety and dosage of the drug. The purpose is to determine how the drug affects the body. • Phase 2 lasts several months to two years and aims to assess the efficacy and side effect profile of the drug. A single phase 3 trial can cost upwards of $100 million. It accounts for about 90 percent of the cost to pharmaceutical companies to develop a medication. Failed drugs The processes of "discovery" and clinical trials amounts to approximately 12 years from research lab to the patient, in which about 10% of all drugs that start pre-clinical trials ever make it to actual human testing. Relationship and Harvoni, both of which attempt to cure or treat major diseases (HIV/AIDS and hepatitis C). Public outcry has worked in many cases to control and even decide the pricing for some drugs. For example, there was severe backlash over Daraprim, a drug that treats toxoplasmosis. Turing Pharmaceuticals under the leadership of Martin Shkreli raised the price of the drug 5,500% from $13.50 to $750 per pill. Patents and monopoly rights One of the most important factors that determine the cost of a drug is the availability of competing drugs and treatments. Having two or more manufacturers producing drugs for the same disease tends to reduce costs. For example, U.S. patent law grants a monopoly for 20 years after filing. After that period, the same product from different manufacturers - known as generic drugs - can be sold, usually resulting in a substantial price reduction and possible shift in market share. Two patents that are commonly used are process patents and drug product patents. Process patents only provide developers intellectual claim to the methods in which the product was manufactured, so a competitor can make the same drug by a different method without violating the patent. In some cases, a new treatment is more effective than an older treatment, or a given drug may work better than competitors for only some patients. The availability of an imperfect substitution erodes prices to a lesser degree than would a perfect substitute. Some countries grant additional protections from competition for a limited period, such as test data exclusivity or supplementary protection certificates. Additional incentives are available in some jurisdictions for manufacturers of orphan drugs for rare diseases, including extended monopoly protection, tax credits, waived fees, and relaxed approval processes due to the small number of affected patients. Transparency The process of creating drugs to testing them to selling them is a long process. Aside from the costs for research and trials, many consumers are unaware of the process of the drug supply chain. There are many middlemen and companies that buy and sell the drugs. This includes "drug manufacturers, drug wholesalers, pharmacies, and payers." Transparency between drug manufacturers and sellers increases accountability between producers and consumers and allows for patients to know more about what they are paying for. Prescription Drug Price Locators allow for patients to learn of more cost-effective sellers and find discounts that will benefit them. In an effort by the U.S. Department of Health and Human Services (HHS) to regulate drug price transparency in television advertising in 2019, the HHS saw a resistance to change against legislation. Although what the HHS sought to change was a step in the right direction for drug price transparency, Federal Judge Amit P. Mehta ruled in favor of the pharmaceutical industry. The ruling was based on the inability to give the HHS such power to enact such legislations. Policymakers have a lot to take into account when regarding the issue of transparency, as there are many middlemen involved in the selling and buying of prescription drugs. ==Effects on consumers==

When the price of medicine goes up the quality of life of consumers who need the medicine decreases. Consumers who have increased costs for medicine are more likely to change their lifestyle to spend less money on groceries, entertainment, and routine family needs. A November 2020 study by the West Health Policy Center stated that more than 1.1 million senior citizens in the U.S. Medicare program are expected to die prematurely over the next decade because they will be unable to afford their prescription medications, requiring an additional $17.7 billion to be spent annually on avoidable medical costs due to health complications. The effects of high prescription costs on consumers also affects their long-term health and overall life expectancy. When properly used, a medication can benefit a patient and cure their disease. When a patient cannot afford to pay for their medication, they lose out on the optimal benefits of proper and adequate dosages. High prescription costs don't just affect patients in the short run, but also deteriorates their overall quality of life, as they are exposed to chronic illnesses that could have been prevented by that first prescription. == References ==

United States Prescription drug prices in the United States have been among the highest in the world. The high cost of prescription drugs became a major topic of discussion in the new millennium, leading up to the U.S. health care reform debate of 2009, and received renewed attention in 2015. High prices have been attributed to monopolies given to manufacturers by the government and a lack of ability for organizations to negotiate prices. Individuals are able to enroll in health insurance plans, which often include prescription medication coverage. However, insurance companies decide which drugs they will cover by creating a formulary. If a medication is not on this list, the insurance company may require people to pay more money out-of-pocket compared to other medications that are on the formulary. There are also often tiers within this approved drug list, as the insurance company may be willing to cover a portion of one drug but prefer and completely cover a cheaper alternative. Medicare Part D is a branch of Medicare that helps to cover costs of prescription medications for patients aged 65 and up. From 2010 to 2018, the Part D plan "nearly quadrupled" its spending on the catastrophic coverage phase. This increase in spending is attributed to the rising pricing of prescription medications. United Kingdom It varies by region in the United Kingdom. In Wales, Scotland and Northern Ireland prescription costs have been completely abolished, however in England the current prescription cost for adults as of 1 April 2024 is £9.90 per item dispensed. There are subsidised costs for those claiming Universal Credit. Canada Canada ranks number three in medication costs in the OECD. The Government of Canada found that during the 2020-2021 year, the country had spent 12.3 billion dollars on medication costs. In Canada, each province and territory publicly funds their own insurance plan rather than a national insurance plan. With differing insurance plans, the medication costs the public varies from area to area. In Canada, the medication pricing is overseen by the Patented Medicine Prices Review Board (PMPRB), which monitors the prices set for patented drugs. One way the PMPRB evaluates whether drug pricing by patentees is excessive by considering international drug pricing. The PMPRB also compares the price of the drug to a similar market. However, the patentees do not need approval of drug pricing with the PMPRB before listing drugs for sale. Developing world In developing countries medications make up between 25 and 70% of health care costs. There have been attempts both by international agreements and by pharmaceutical companies to provide drugs at low cost, either supplied by manufacturers who own the drugs, or manufactured locally as generic versions of drugs which are elsewhere protected by patent. Countries without manufacturing capability may import such generics. The legal framework regarding generic versions of patented drugs is formalised in the Doha Declaration on Trade-Related Aspects of Intellectual Property Rights and later agreements. == See also ==