Medication costs
Medication costs, also known as drug costs are a common health care cost for many people and health care systems. Prescription costs are the costs to the end consumer. Medication costs are influenced by multiple factors such as patents, stakeholder influence, and marketing expenses. A number of countries including Canada, parts of Europe, and Brazil use external reference pricing as a means to compare drug prices and to determine a base price for a particular medication. Other countries use pharmacoeconomics, which looks at the cost/benefit of a product in terms of quality of life, alternative treatments (drug and non-drug), and cost reduction or avoidance in other parts of the health care system (for example, a drug may reduce the need for a surgical intervention, thereby saving money). Structures like the UK's National Institute for Health and Clinical Excellence and to a lesser extent Canada's Common Drug Review (a division of the Canadian Agency for Drugs and Technologies in Health) evaluate products in this way.
Medication costs can be listed in a number of ways including cost per defined daily dose, cost per specific period of time, cost per prescribed daily dose, and cost proportional to gross national product.[1]
A November 2020 study found 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.[2]
Definition[edit]
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.[3]
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.[4] The cost is generally influenced by a financial relationship between pharmaceutical manufacturers, wholesale distributors and pharmacies.[5] 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.[5][6] 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.[7] 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.[8] Prescription costs are a regular health care cost for the sick and may mean economic hardship for the underprivileged.[9]
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.[10]: 418
Effects on consumers[edit]
When the price of medicine goes up the quality of life of consumers who need the medicine decreases.[36][37] 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.[36] They are more likely to go into debt or postpone paying their existing debts.[36] High drug prices can prevent people from saving for retirement.[36] It is not uncommon for typical people to have challenges paying medical bills.[36] Some people fail to get the medical care they need due to lack of money to pay for it.[36] In low and middle income countries up to 90% of people pay for medications out of pocket.[38] 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.[2]
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.[39] 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.[39] Evidence from studies indicates that insulin therapy as a treatment for patients with high glucose levels that are not yet diabetic, leads to a decrease in insulin resistance, which benefits patients.[40]
References[edit]
Common measures taken to reduce costs[edit]
Consumers commonly respond to high or increasing drug prices by doing what they can to save drug costs. The most commonly recommended course of action for consumers who seek to lower their drug costs is for them to tell their own doctor and pharmacist that they need to save money and then ask for advice.[41] Doctors and pharmacists are professionals who know their fields and are the most likely source of information about options for reducing cost.[41]
Depending on the country and health policies implemented, there are also options to search for the most convenient and affordable health insurance plans without having to consult a healthcare provider or obtain insurance through the employer. However, those who seek to purchase insurance individually through the individual market are most likely to be underinsured and therefore could potentially have a higher prescription cost.[42]
There can be significant variation of prices for drugs in different pharmacies, even within a single geographical area.[43] Because of this, some people check prices at multiple pharmacies to seek lower prices.[43] Online pharmacies can offer low prices but many consumers using online services have experienced Internet fraud and other problems,[44] such as long shipping times from overseas and a higher insecurity regarding quality, genuineness and safety of the ordered products.
Some consumers lower costs by asking their doctor for generic drugs when available.[45] Because pharmaceutical companies often set prices by pills rather than by dose, consumers can sometimes buy double-dose pills, split the pills themselves with their doctor's permission, and save money in the process.[46]
Not purchasing the medications / inaccessibility[edit]
In countries without universal healthcare, there can be unaffordable out-of-pocket costs for needed medications. Approximately 25% of Americans find it difficult to afford prescription drugs.[47] In the case of expensive anti-obesity medications it has been noted that many people "who could most benefit from weight loss may be unable to afford such expensive drugs".[48] This may be of higher concern for conditions that are more risky or detrimental to health and/or which, unlike obesity, don't have additional treatment options that are both widely known and effective – like further improvements in diet and physical activity in the case of obesity. A study found that among U.S. Medicare beneficiaries without subsidies, 30% of prescriptions written for anticancer drugs, 22% for hepatitis C, and more than 50% for disease-modifying therapies for either immune system disorders or hypercholesterolemia were not filled by patients.[49]
The right to science and culture is one of the rights in the Universal Declaration of Human Rights according to which "Everyone has the right freely to participate in the cultural life of the community, to enjoy the arts and to share in scientific advancement and its benefits."[50]