Measures to Alleviate Prices of Prescribed Drugs

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Measures to Alleviate the Prices of Prescribed Drug

Introduction

United States of America during the last five years is facing a serious problem of rising cost in their health care system. According to an estimated rate the cost has been increasing at a rate of 15% per year and this rate has beaten the inflationary rate in the country. Among the 15% rise in the cost, prescription cost has contributed to an 8-9% percent. The experts have given their view that the increasing cost will have an effect on the services provided by the physicians and many health care organizations. Government has set their targets to find out the reasons for the increase in the cost of the prescribed drugs and then take actions to control the increasing cost.

Discussion

According to Shi and Singh (2005) the health care industry in United States of America is pluralistic as there are many private organization providing health care facilities to the citizens. The healthcare industry in US is a free market economy where prices are set by the organizations according to the cost involved in the provision of the health care services to the citizens. Thus the ownership of the industry is in the hands of the private sector that are able to create monopolies in the industry. The major source of financing of these private health care institutions is either from the private people, different volunteers and relief in taxes or the retained profits. The reimbursement methods provided by the healthcare organizations vary among the people for example employees have different reimbursement method or percentage and etc.

Thus the three major reasons for the increase in the prices of the prescribed drugs are due to the private ownership that operates with the aim of providing services in order to generate profits for the organization. Second reason for the rise in prices of the prescribed medicines is because of the increase in latest medicines more which are costly. The third reason for the increase in the rates of medicines is due to the increase in the consumption of medicines by the people. So these are three major reasons for the increase in the prices of the prescribed medicines, apart from these reasons there are several other minor reasons which have led to an urge in the prices of the prescribed medicines.

The government of United States took this issue seriously and after many sittings with the government officials, legislation was passed to control the increasing prices in a way that could not alter the innovation factor in the industry. Thus measures were taken that could control the prices and would not interfere in the innovation or adoption needed in the medicines provided to the citizens. The first step that was initiated was to change the ownership and the style of the health care sector in the country. Government realized that private ownership is important but in matters like health and in other service sector it is important that ...