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The Rising Costs of

Drugs in Americas
Healthcare System
History of the American Healthcare System

Began in the early 1900s known as American Medical Association that


created membership for physicians around the country.
By the 1960s hospital care doubles and becomes expensive.
By the 1990s the drug industry awakens and begins raising drug prices
faster than the rate of inflation.
We allow drug pricing to skyrocket because it gives companies the incentive
to innovate new drugs.
While the U.S continues to innovate in finding new cures, the mortality rate
among American health has been declining.
Today despite the U.S being the wealthiest country we also have the most
expensive drugs in the world.
At the rate of drug price increases, some projects that Medicare will be
unsustainable in the near future.
How Increases Affect The Role of Families
Who Cannot Afford to Pay The High Cost
Many times people tend to ignore their health because they cannot
afford the costs.
For a drug called EpiPen which treats allergies, it has recently hiked
up to $600 from $100.
Since it expires every year, it needs to be repurchased the next
year.
Patients who cannot afford it will try to use alternatives such as
buying the syringes and filing it with epinephrine ampoules on their
own.
This brings the risk of a product that can be less effective than the
EpiPen or product failure upon use.
While drug companies say that they arent affecting people because
they raise the drug prices on insurances. They are affecting
taxpayers indirectly through the insurance companies like Medicare.
How Pharma is Perceived
To the people pharma is just looking for an excuse to make
profits.
They are also perceived as insensitive to other people who
cannot afford the drugs.
They are also seen as an industry that has power to lobby
Congress to pass bills in favor of what they like to push their
agenda.
They are seen as putting profit before lives.
Pharma is also seen as setting a monopoly on the drug they
create.
They are also seen as trying to take in as much money as they
can from insurers and Medicare.
Pharma is seen as taking all the profits because they know it
will be regulated one day. They are enjoying it now while they
still can.
How Pharma Perceives
Themselves
One of the reason for the high costs is that Pharma takes high risks and
innovates.
Pharma perceive themselves as helping sick people by spending millions of
dollars in research and development. However, that is mostly an excuse for
them to make more money.
Another reason they justify themselves for the price gouge is because to test
a new trial for a drug it would costs millions of dollars and have high
percentage of failing.
They believe that they get to set any price they want because of the high cost
for innovation, first class life saving drugs. This leads them need to recoup the
lost of profits on their research and development just so they can breakeven.
Pharma believes that when they go into business they are already at a loss
because it costs money to make money. One trial can start at $1 million
dollars and up.
Having the best drug in the world but low
mortality rate (Institution changing)
The prices are getting higher and higher every year.
The U.S is mostly the first country to find a cure for any diseases,
but other countries doesnt allow price gouging.
One of the reason lawmakers allow the medical institution to price
gouge is so that we stay innovative in future medical research.
Such as how the U.S constantly pours billions of dollars into cancer
research.
With such great upside for finding new cures comes a huge
downside as well for people suffering to make copayments.
Where it currently stands it seems switching to a socialist system
would be the best idea but it might stop innovation since it doesnt
present a profitable system for pharma companies.
How Pharma Drug Pricing Affected
Other Institutions In Our Society
Drug pricing affects our government institution.
If your grandma and grandpa is on social security
then they can be expected to be affected by the price
hike.
Although Medicare is a separate program. Social
Security contributes to Medicare and many other
program.
A price increase will make it hard for seniors to afford
the cost of their medicine because they dont get a lot
of money from Social Security.
Medicare has also been growing rapid and seen as on
a unsustainable trajectory based off of their pharma's
pricing game.
What Pharma Has Not Changed. How
has this institution remain stable.
The stable feature of the institution is that we will
constantly find new cures.
Humans will always have a constant need for medicine
and pharma will continue to produce it.
As long as there is a need someone will make.
Currently, many companies are scared to use their
profits to fight Zika Virus because they think that
humans will eventually get used to it. So the
government is stepping in to create the vaccine and
they have been spraying the streets of with chemicals.
Breaking through in research is what the U.S does best
and we are the country expected to find a cure for the
disease.
Ways of improving our Healthcare
system by bringing down drug prices

By importing drugs from other countries like Canada we can create a


competitive market between the U.S and Canada. The Canadian Healthcare
system is publicly funded and priced controlled. If we import drugs then U.S
drug companies would lower their prices due to competition from other parties.
The next proposal is to allow Medicare to negotiate for lower prices. Medicare
has a big influence because it is a government entity that is the largest
purchaser of drugs. If we allow them to negotiate we can get lower prices on
drugs. With 37 million people on Medicare private Part D plan, there is a lot of
bargaining power here. Thus, allowing negotiation will put pressure on
companies to give better discounts or else dont do business with them.
The 3rd proposal is to switch to an Australian or Swiss Healthcare system. This
would put the government in control and decide what the maximum amount to
be charged. This creates a fixed price and caps the max amount to be charged.
They also punish companies that has deceived them by overcharging. This
allows them to recoup their losses.
Functionalist Theory Perspective
on Drug Pricing
The price gouging of drugs represents a functionalist theory
because the institution is unstable and needs to become stable
again. To achieve social order we need the drug pricing to be stable
and fair to people.
The healthcare industry is disrupted and now politicians need to
find a way to make this unregulated market back to equilibrium.
The only way to reach a point of equilibrium is if there is a system
that fits both the needs of the people and that gives the Pharma
companies their incentives.
It also represents a living organism working together because the
people needs the drugs to survive. People are dependent upon
drugs. The companies are dependent upon the people to buy their
drugs.
Conflict Theory Perspective on
Drug Pricing
There is an inequality and struggle for power among two groups of people
here.
The Pharma companies can be considered the bourgeoisie for controlling the
companies
The people can be considered the proletariat since they have to work hard
for the drugs.
This capitalistic society creates an inequality between the two groups
because the pharma companies have medicines that the people need. The
people are dependent upon the medicines.
This gives the bourgeoisie the upper hand in making the decision that they
feel is justified.
However, the bourgeoisie are also dependent upon the poor sick people to
buy their medicines. At some point the proletariat will rise up and exploit the
inequality of pharma and social order will be restored.
Without the people to take advantage of the bourgeoisie would not be in
business. So we see how both side of the party needs each other for the
system to work.
Conclusion of Who This System
Works Best For
This system is in favor of the pharmaceutical companies.
No matter how much we want the system to change, the pharma
companies will aggressively lobby against any idea of a price
control.
There is too many members of Congress that is bought with by
pharma profits.
The industry generates over $400 billion dollars per year, which
goes to show the amount of power they hold in lobbying our
congressman.
We see from the chart that $153 million was spent for 2011 for
lobbying, which shows that money is no issue for these
companies.
Works Cited
Jones, Jordan. "Supporting the Safe and Affordable Drugs from Canada Act can
help save money and lives."TheHill. N.p., 01 Feb. 2016. Web. 22 Mar.
2017.
Sachs, Rachel, and The Conversation. "How to Bring Down Drug Prices Post-
Election."Scientific American. N.p., 01 Nov. 2016. Web. 22 Mar.
2017.
Emanuel, Ezekiel J. "The Solution to Drug Prices."The New York Times. The New
York Times, 09 Sept. 2015. Web. 22 Mar. 2017.
"Healthcare Crisis."PBS. Public Broadcasting Service, n.d. Web. 01 Apr. 2017.
"A Brief History: Universal Health Care Efforts in the US."A Brief History: Universal
Health Care Efforts in the US | Physicians for a National Health
Program. N.p., n.d. Web. 01 Apr. 2017.
Elgin, Benjamin, and Robert Langreth. "The Real Reason Big Pharma Wants to Help
Pay for Your Prescription."Bloomberg.com. Bloomberg, 19 May 2016.
Web. 02 Apr. 2017.
Work Cited Cont.

Moeller, Philip. "Get ready for big changes in Medicare drug pricing."PBS. Public
Broadcasting Service, 16 Mar. 2016. Web. 02 Apr. 2017.
"On the Issues: Fighting to Lower Prescription Drug Prices."Bernie Sanders. N.p.,
n.d. Web. 02 Apr. 2017.
Elsevier, Name |. "R&D Innovation & Pharma Drug-Device Pricing."Pharma R&D
Today. N.p., 22 Sept. 2016. Web. 02 Apr. 2017.
"EpiPen surge in prices affecting families everywhere."WGN-TV. N.p., 24 Aug.
2016. Web. 02 Apr. 2017.