Though they cost an arm and a leg, prescription drugs reduce overall spending on medical care. Although this may sound strange, the explanation is quite simple. Like medical care, drugs cost money to develop and distribute, however, the lasting effects are beneficial.
Here are a few facts you should be aware of:
vResearch/development for a prescription drug takes 10-15 years to complete.
vOf every 5,000-10,000 compounds tested, only 5 make it through clinical trials.
vOf these 5, only 1 makes it through FDA review.
TuftsUniversityCenter for Study of Drug Development found that it takes around $1.3 billion to bring a single drug to the shelf, and on average, only 2 in 10 drugs earn enough to cover the cost of research and development. Thus, a company must recoup when finding a successful drug.
Today, we face the threat of government implemented price controls on prescription drugs. Though this may sound appealing, there are some facts we must consider. Research and development can only take place because of the funding provided by investors. If pharmaceutical manufacturers are forced to sell their products at a price below market value, the investment becomes less attractive. Therefore, research and development subsides, limiting innovation.
There must be some disconnect though in the thought process of the current administration: we constantly hear that we must encourage innovation, yet this is from the same mouth that would like to implement price controls.
Consider these facts:
vOver the past decade, life expectancy has risen to an all time high.
Men: 75.4 years Women: 80.7 years
vNearly 350 new medications have been developed to treat strokes, disease, diabetes, cystic fibrosis, cancer, and other chronic conditions.
vToday, there are more than 2,700 new drugs for 5,000 different conditions providing HOPE (not Obama’s kind) to millions with heart disease, cancer, Alzeiheimer’s, etc.
From 1971 to 2003, the number of cancer medications tripled. In fact, the U.S.leads the world in treating cancer according to a 2008 study published in The Lancet Oncology. Additionally, Americans have a better survival rate for 13 of the 16 most common cancers.
All of this is because of research and development. i.e. innovation. President Obama is right; we MUST encourage innovation to thrive as a society. However, price controls are NOT the answer.
True: Prescription drugs are not cheap.
False: Overall medical costs skyrocket because of them.
All facts and figures taken from studies cited in The Top Ten Myths of American Health Care: A Citizen’s Guide by Sally C. Pipes. I strongly urge you to read this book.
Overall, prescription drugs presently make
up 10% of healthcare spending. However, though this percentage is higher than
in recent decades, prescription drugs in fact reduce overall spending on
medical care.
Did you know 6 in 10 Americans have at
least one chronic disease? Nearly 85% of all health care spending is spent on
managing these diseases such as diabetes, heart disease, cancer, HIV, obesity,
arthritis.
In a study by Gerard Anderson, a
professor at John Hopkins, some very shocking figures are presented:
· 82% of hospital admissions and 79% of
all doctor visits are by people with chronic diseases.
· People with 2 chronic diseases cost
the health care system 5 times more than those without.
· Those with chronic diseases are 4
times more likely to be hospitalized.
Why are these percentages so high? The
answer is simple. We are old and fat.
In a country where 2 in 3 American adults are overweight, and 1 in 8 Americans
are over the age of 65, it is no surprise that heart disease kills 1 person
every 34 seconds and diabetes diagnoses have doubled over the past decade.
However, we MUST realize prescription drugs curtail the costs. Drug prices do not drive up health care costs.
Example:
Lipitor is cheaper than heart surgery.
The Journalof the American
Medical Association reported that from 1999-2006 after tracking nearly
45,000 heart patients from 14 different countries, the rate of death from heart
attacks dropped by half. Why? The increasing number of cholesterol-lowering
drugs, blood thinners, stents, and angioplasties did the trick. From 1999-2005,
the proportion of patients developing congestive heart failure dropped from
19.5% to 11.
A 2005 study in Medical Care
found that $4-7 is saved on other medical spending for every additional dollar
spent on drugs for blood pressure, cholesterol, and diabetes. Additionally, a
paper from the National Bureau of Economic Research states that Medicare saves
$2.06 for every dollar spent on medications.
True: Prescriptions cost money, but
cost less than hospitalization and surgery.
False: Drug prices drive up
health care costs.
*All facts and figures taken from
studies cited in The Top Ten Myths of American Health Care: A Citizen’s
Guide by Sally C. Pipes.I strongly urge you to read this book for
more information.
