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Pharmaceutical Companies

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The health costs have been a challenges to government of both the developed and underdeveloped countries. For a long time the federal government in the U.S. has tried to bring down the costs of the health care coasts in vain. Since the declaration of the health care cost being a crisis in 1969 by the Nixon Administration the health care system has always been elusive. The reason given for this is that the health care costs involve some kind of medical economics which have been hard to balance in order to acquire a cheap health care. It is claimed that any dollar spent on the health care cost is a source of income to another person. The money which is spent on the national expenditure is actually sources of incomes to so many stakeholders in the health care sector which include doctors, hospitals, and pharmaceutical companies among others. Any attempt to reduce the costs of the health care costs will meet with formidable forces against the attempt. Among the stakeholders benefiting from such high costs of the medical care costs are the pharmaceutical companies. It has been argued more often than not that the pharmaceutical companies are making a major towards increasing the costs of the health care.  This research examines the role played by the pharmaceutical industry in the light of increasing health care costs or contributing to good health care. To carry out this research the paper use of the literature review to collect data on the research.

The pharmaceutical industry and the health care costs. The main lamenting presenting against the pharmaceutical companies is that they continuously keep on increasing the price of the medication. Louse gives an example of PhosLo which back in the year 2002 a three month supply would cost $108.25 but just seven years later its generic version calcium acetate coast a whole 488 percent more (Louse 2009). Though Medicare may cut the costs but as matter of fact the cost passed down in the form of higher premiums. Louse (2009) argues that the pharmaceutical companies make a lot of profits out of the drugs which are they develop.  

He claims that the companies are able to make a lot of profits because the government can not restrain their setting of prices for the drugs and thus the prices can be set at ranges which these companies see fit for themselves. Louise (2009) goes down to being specific and implicates Colorado with adding separate prescription deductibles to individual health plans (Louse 2009; Theodore, Oberlander, and White, 2009). The prices of the drugs aside, how do they function? Are they important at all?

According to Craine (1985), prescription drugs offered through the pharmacies have been quite effect as highly cost effective treatment. From research statistics it has been shown that drugs represent, “an economical form of treatment that can reduce overall health care costs” and thus, “It is clear that the pharmaceutical industry can play a prominent role in containing costs within the health care delivery system” (Craine 1).current information ascertain claims made by Craine (1985) that prescription medicine is significant and can not be ignored on the role that they play on the health care system (PHRMA 2010; Health 2010). It is true that the prescription drugs are quite effective and very necessary as without them the whole health care system will be come to a stand still. However it should be noted that the prices of the drugs have ever been on the rise. Arguing from the statistics the prescription of drugs may be said to make relatively a low contribution to the costs of the overall health care costs.

PHRMA (2010) argues that the prescription drugs in the real sense are taking very small amount of money from the health care budget:

In fact, according to annual data for 2006 compiled by the Centers for Medicare and Medicaid Services (CMS),  just 10 cents of every dollar spent on health care went to medicines (both bran-named and generic, plus the cost of pharmacies and the remainder of the distribution chain). At the same time, growth in overall prescription drug spending has decreased sharply in recent years.  In 2006, it was at the second-lowest level in a decade – 8.5%.  It fell to this level even though 2006 was the first year that millions of Medicare beneficiaries first gained comprehensive prescription drug insurance. At just 10% of overall health care spending, new medicines are a valuable part of the health care equation. (PHRMA p. 1)

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