Current pharmaceutical pricing creates obstacles for a number of patients, healthcare facilities, and for the overall progress of medical science. The modern landscape of policies regarding pharmaceutical pricing is unable to mediate adequate strategies to benefit clients, producers, and healthcare professionals. However, there are three actions that can be utilized by congress in order to improve the pricing factors of medicine to make it more available to those that require it.
The practice of drug development is incredibly time and capital consuming. As such, it motivates pharmaceutical companies to often set unbelievably large prices. In order to combat this issue, the implementation of innovation-friendly policies is essential. Essentially, such policies attempt to distribute costs of drug development through a number of routes such as taxes, regulations regarding reviews process, and through other means (Morgan et al., 2020). This lifts a portion of the economic burden of the manufacturing firm.
Currently, companies enjoy market monopolies through either patented goods or FDA-granted exclusivity. However, this causes them to be the sole price-setters of certain medicine and pharmaceuticals. As such, modern policies should analyse and offer more reasonable monopoly protections to such firms (Beall et al., 2020). This policy can be observed through limiting patent varieties and the time they can be viable for. Certain drugs that have common uses may even be required to be non-monopolized.
While competition is a useful tool within economics, it has failed the pharmaceutical market in the past few decades. This is largely because it is often used as a tool to inhibit the production of generic medication by smaller firms. Contention in which one firm has more capital and influential power ultimately limits the introduction of new products (Lakdawalla et al., 2018). As such, policies should observe changes in products that influence prices more closely with producers needing to exhibit more transparency when presenting such alterations.
References
Beall, R. F., Hollis, A., Kesselheim, A. S., & Spackman, E. (2021). Reimagining Pharmaceutical Market Exclusivities: Should the Duration of Guaranteed Monopoly Periods Be Value Based?Value in Health, 24(9), 1328-1334. Web.
Lakdawalla, D. N. (2018). Economics of the Pharmaceutical Industry.Journal of Economic Literature, 56(2), 397-449. Web.
Morgan, S. G., Bathula, H. S., & Moon, S. (2020). Pricing of pharmaceuticals is becoming a major challenge for health systems. BMJ, 368(1). Web.