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Group C Against drug regulation

Christopher Nicholas posted Feb 9, 2018 5:54 PM

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Title slideChangeEFFECT OF POLICY CHANGE ON STAKEHOLDERSReasons why policy is not important

Policy Debate

1st Slide Currents scenario and related factors – Christopher N

  • U.S. customers use just about twice the amount of funds on drugs as compared to other countries. Currently, more high-cost drugs being consumed by Americans as compared with other Western Countries. However; in recent years, there has been pressure on the government to lower the costs of drugs. There is nevertheless some debate on the new course such as regulation and price cuts will reduce consumer spending. The decreased revenues for pharmaceutical manufacturers may lead to a slower step of improvement. The concern is whether it is prudent to benefit the actual generation at the expense of future generations (Goldman et al., 2008).

Slide: What effects will the policy change have on stakeholders?- Jorge G.

  • There are several disadvantages related to the reference prices that the interested parties must face. These include the fact that the reference price does not take into account the incremental innovation involved in the process of drug discovery in a class of drugs. Also, the manufacture and innovation of improved medicines can be more expensive. Since they present unique advantages that require higher reimbursements and prices compared to the products with which they are grouped. “Establish prices” or reduce them would stop the innovation of medicines through Pharmaceutical products also, new and new drugs can be much more expensive than reference prices, which means that patients choose new drugs but pay more. This creates an obstacle to obtaining medications with an additional advantage, which could help patients manage and treat their conditions more effectively. Drug imports would reduce the profit margins that allow companies to seek cures for diseases and could endanger patient safety. Without the current patents of 20 years, they believe that there would be no economic incentive to produce medicines that are necessary, but expensive. Also, the reference price system can frustrate R & D efforts by diverting resources to areas that are not under a reference system, since prices in such categories are free (Galizzi, Ghislandi, and Miraldo, 2012). Patients and doctors also recognize that the grouping of medicines and the responses of people who use similar medication are different regarding side effects, absorption, quality and contraindications among other inappropriate effects. Pharmacists, doctors, and patients may be prone to change drugs throughout the group, and this can lead to serious health complications. It is almost impossible to refine the grouping methods, as well as the classification of the products to make the grouping of medicines realistic for users (Vogler, 2012).

Slide Reasons why policy is not important- Geidy A

  • The policy is not important as it will lead to lower for the pharmaceutical industry in turn affecting resources for research and innovations; it has the potential of impacting future advances in the industry. The other reason is to look for different ways of implementing price cuts, and it could be done by focusing on alternative mechanisms. Additionally, there are generics on the market that are equally potent that patient could opt for instead of price cuts of existing brands. Another method that can be utilized is the reductions of consumer costs like using co-payments, this has the potential impact of subsidizing the rates without affecting the revenue of pharmaceutical industries, and it will be a win-win scenario (Goldma et al., 2008).

Slide: What are the costs to stakeholders?- Jorge G

  • The cost of prescription drugs for patients is quite high which causes many not to take their treatment correctly. Causing patients to now deal with substandard care, which translates into increased costs of care, more hospitalizations, financial losses due to complications, multiple visits to the emergency room, loss of productivity and may even cause death, since they do not handle their condition properly (Cohen and Villarroel, 2015). According to Beaugureau, (2017) in 2015, Americans spent 1,200 per capita on prescription drugs, the highest rate in the world. The Pharmaceutical industry of the United States is the significant beneficiary of the high costs of the medicines. This translates into substantial profits for them to grow that they claim that the drugs are so expensive and that the monopoly of the industry is necessary to be able to support the high research costs even if the financial data shows otherwise. Being one of the most profitable industries in the United States (Engelberg, 2015).
  • With the purpose of financial savings, the doctors have been educating themselves to indicate to the patients medicines under references, without taking into account their effectiveness and safety for the patient. For pharmaceutical products, the reference price system has increased price competition, reducing the price of medicines. While this can apparently be interpreted positively, it means that pharmaceutical products lack the money for R & D that is essential for developing better medicines. This can have costly implications, as diseases continue to evolve, demanding better and more effective medicines, which pharmaceutical companies cannot provide. This will lead to high care costs and costs associated with a higher mortality and mortality rate (Dylst, 2012).

Slide Issues and research against regulation and prices cuts- Geidy A

  • Regulation of the manufacturing is seen as a trade-off in the middle of current day discount in prices and fewer drugs for use in treatment in upcoming. In addition to that, regulation effects in a slower pace of innovation (Sood et al., 2008). Studies have shown that outright price controls have the prospect of reducing life expectancy in the long run. 20% decrease in pharmaceutical companies’ profits would affect life expectancy rate to the magnitude of 0.2 years for Americans on average for the mid to late fifties and by 0.1% for a similar situation if it were in a European country (Goldman et al., 2008).
  • Direct price controls in countries like the US where there are no protocols, the impact is felt much more by the manufacturing corporations as revenues fall. Appraisals placed such a situation to approximately 22.5%; this will, in turn, lead to delay by pharmaceutical companies in launching new products (Sood et al., 2008). As well, price regulation will lead to reduced competition as some pharmaceutical companies may be mandatory to join just to stay afloat, and consequently, there will be fewer companies as a result. Finally, other methods can be used like making medication inexpensive for the old; it could be able to happen by giving them the options to choose from.


Beaugureau, M. (2017). Why Are Prescription Drugs More Expensive in the U.S. than in Other Countries? Retrieved from…

Cohen, R. & Villarroel, M.A. (2015). Strategies Used by Adults to Reduce Their Prescription Drug Costs: United States, 2013. Center for Disease Control and Prevention. Retrieved from http;//

Dylst, P. (2012). The impact of reference-pricing systems in Europe. 24th Annual EuroMeeting, DIA, 2012 March 28, Copenhagen, Denmark.

Engelberg, A. (2015) How Government Policy Promotes High Drug Prices. Retrieved from…

Galizzi M. M., Ghislandi, S., & Miraldo, M. (2012). Effects of reference pricing in pharmaceutical markets: A review. Pharmacoeconomics, 29(1), 17-33.

Goldman, P. D., Lakdawalla, D. N., Michaud, P. C., at al. (2008). Regulating drug prices: U.S policy alternatives in a global context. doi: 10.7249/rb9412

Islam, I. (2015). Rising cost drugs: Where do we go from here? Health Affairs. Retrieved from…

Sood, N. Vries, H. D., Gutierrez, I. Lakdawalla, D. N.,& Goldman, D. P. (2008). The effect of regulation on pharmaceutical revenues: Experience in nineteen countries. Health Affairs, 28(1). doi: 10.1377/hlthaff.28.1.w125

Vogler S. (2012). The impact of pharmaceutical pricing and reimbursement policies on generics uptake: implementation of policy options on generics in 29 European countries—an overview. Generics and Biosimilars Initiative Journal (GaBI Journal),1(2):93-100. doi:10.5639/gabij.2012.0102.020

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