The U.S. Government has failed to devise a replacement bill for the Affordable Care Act–and an already complicated healthcare system continues to meet challenges.
Despite efforts on behalf of Republican congressmen like Lindsey Graham, the U.S. Congress cannot seem to come to a consensus regarding the fate of millions of Americans and government-provided healthcare. Many attribute this tumult to the high cost of access to healthcare and much-needed pharmaceuticals.
A new study illuminates how dramatic drug price increases affect prescribing habits of medical professionals.Profits Over People: New Study on Drug Price HikesClick To Tweet
Less Competition Yields Higher Prices
It’s not a new concept. The less competition there is in an industry or for a product, the higher the price tends to become. When it comes to potentially life-saving drugs and medicine, this aspect of capitalism can frustrate people and confound legislators.
Republicans have long promised to “repeal and replace Obamacare”, but another recent failure has left many people concerned about the future of healthcare in the U.S. While some support single-payer healthcare, others would see cuts to programs like Medicare and Medicaid as proposed in previous Republican ACA replacements. This would mean revoking access to medical benefits many received after former U.S. President Barack Obama expanded these programs with the ACA.
This consternation also comes after several pharmaceutical companies have come under fire. Drug maker Mylan and former CEO of Turing Pharmaceuticals Martin Shkreli (among others) raised the prices of drugs such as the EpiPen as much as 8,000%. Though this presents obvious concerns for the users of these drugs, it raises issues for physicians, too, as a new study shows.
Prescriptions Affected Negatively by Higher Prices
Two specialized drugs for cardiovascular conditions (Nitroprusside and Isoproterenol) increased in price by ~30% and ~70% respectively. For perspective: in 2012, Nitroprusside cost about $27 USD. It jumped to around $880 USD in 2015. Isoproterenol cost around $26 USD in 2012. But, in 2015, it cost most than $1,700 USD. What changed?
Umesh Khot, MD of the Cleveland Clinic studied the effects of these price hikes on the prescribing habits of physicians. He says the reason for these price increases: going from multiple producers to just one.
As part of business strategy, controlling parties raised prices to increase profits. Since no other competitors remained, the prices held fast.
In the three years of continuous price hikes, use of these two drugs decreased by almost 50%. This matters because many pharmaceuticals are viewed as “price insensitive”. These specialized drugs are integral, so many manufacturing companies believe that people will pay any price for them. This new study shatters that belief.
What is perhaps most interesting is one of the ancillary findings of the study:
“…physicians have decreased their rate of prescribing the drugs even though in the hospital setting both they and patients are typically insulated from the cost increases.”
Unfortunately, we’ll have to wait for an answer regarding that mystery.
The Future of Healthcare: Profits or People?
Regardless of where you fall on the current spectrum of the healthcare debate, automation is the future. Industry 4.0 will necessitate a laser focus on connecting the priorities of many industries, but, right now, that priority is “the bottom line”. Healthcare currently lies behind several gateways: employers, insurance companies, pharmaceutical companies, and the government.
Beyond the question of regulating the cost of prescription drugs is the question of curing many of the diseases that necessitate them. Cures are more efficient and humanitarian, but less profitable for pharmaceutical companies.