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The Actuality of the Prescription Drug Expenditures in the U.S.

By July 13, 2020Articles

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

The increasing cost of prescription drugs in the U.S. warrants a reform in order to lighten the financial burdens on the patients or the insured.

The prescription drug expenditures in the U.S. were 360.3 billion U.S. dollars in 2019 with a steady increasing trend in annual historic records since 2005, and there has been a collective call from the public for a change in the skyrocketing levels of spending in prescription drugs.

Utilization and a unit cost seem to be the main areas that need to be carefully examined for any change. Increased utilization of drugs primarily results from the FDA approval process for brand and generic drugs, which is costly due to the multiple phase process. Overutilization related to a fee-for-service system and to patients’ preferences on drug advertisements without adequate drug information can be other factors to be considered for drug utilization. Cost per unit for drugs, especially for brand drugs, is remarkably high concerning the exclusive period.

There are multiple ways to address the rising costs of pharmaceuticals by the policy makers at the federal level. Expediting the FDA’s drug approval process and eliminating industrial practices that discourage generic utilization can substantially alleviate the severity of the issue. Government involvement in Medicare Part D for price negotiation can also significantly help lower the costs.

The U.S. government is partially, if not mostly, responsible for the high cost of prescription drugs in the U.S. by granting drug companies an enormous power for price negotiation. The U.S. policy makers should step out of the pharmaceutical lobbying network and take appropriate regulatory actions to make adjustments on the monopolistic culture of the pharmaceutical industry, which has been deeply rooted in the country.

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