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Financial Control of the Pharmaceutical Industry in the US

By May 26, 2020Articles

By June Kim, PharmD, MBA
Assistant Professor, Department of Clinical & Administrative Sciences, School of Pharmacy

Controlling financial flows of the pharmaceutical industry in the US is not an easy task due to the fact that the pharmaceutical market in the US is complex involving multiple parties such as manufacturers, distributors, payers, pharmacy benefit managers, and patients. Another major party, however, that we must consider for financial control of the pharmaceutical industry in the US is the politicians, the powerhouse of legislative decisions.

From 1999 to 2018, the pharmaceutical and health product industry recorded $4.7 billion- an average of $233 million per year- in lobbying expenditures at the federal level, more than any other industry. Of the pending, $22 million went to presidential candidates and $214 million went to congressional candidates. Of the 20 senators and 20 representatives who received the most contributions, 39 belonged to committees with jurisdiction over health-related legislative matters, 24 of them in senior positions. Being empowered by the political support, the profitability of 35 large pharmaceutical companies has been significantly higher than that of 357 large non-pharmaceutical companies from 2000 to 2018 in all categories of cumulative revenue, gross profit, EBITDA (earnings before interest, taxes, depreciation, and amortization), and net income.

It appears that an efficient way to reduce drug costs in the US is to elect a politician(s) without conflict of interest in the pharmaceutical lobbying network who will make fair legislative decisions in health-related issues to finally control the financial angle of the pharmaceutical industry.

The question is… “Could this be possible?” Personally, I believe so with our hope in the Lord. If He can part the Red Sea, He can certainly stabilize the financial flows of the pharmaceutical industry in the US.

About American University of Health Sciences

AUHS is a Christian based, minority-serving university, which educates students for careers in the healthcare profession. AUHS emphasizes the values of faith in God, love of humankind, and belief that all people have a right to healthcare and deserve a good quality of life based on the wellness of body, mind, and spirit. The university celebrates diversity and reaches out to groups currently underrepresented in healthcare and research. AUHS provides the undergraduate and graduate curriculum, hands-on practical training and supportive environment required to create competent and compassionate healthcare professionals.

American University of Health Sciences is accredited by the WASC Senior College and University Commission (WSCUC), 985 Atlantic Avenue, Suite 100, Alameda, CA 94501, 510.748.9001. WSCUC is a regional accrediting body recognized by the U.S Department of Education (USDOE) and the Council on Higher Education Accreditation (CHEA). wascsenior.org

American University of Health Sciences (AUHS) is a member of the Transnational Association of Christian Colleges and Schools (TRACS) [15935 Forest Road, Forest VA 24551; Telephone: (434) 525-9539; e-mail: info@tracs.org], having been awarded Accredited Status as a Category III institution by the TRACS Accreditation Commission on October 24, 2017. This status is effective for a period of up to five years. TRACS is recognized by the United States Department of Education (USDOE), the Council for Higher Education Accreditation (CHEA), and the International Network for Quality Assurance Agencies in Higher Education (INQAAHE). tracs.org