Tag: pharmacy

The Healthcare Economy in the USA

Despite being the economic and military superpower of the world, the United States has a uniquely troubling dilemma among its first-world peers: costly and often inefficient health care for average citizens. The United States if fiercely capitalist in nature, and often incorporates this into the government in places where other nations would not, such as in regards to health care.

American health care facilities and insurers privatized, and thus have no uniform pricing metric, and so medical bills and insurance policies alike have cost through the roof. Also, due to the polarized nature of American politics, any efforts to make health care public are met with fierce opposition and often implemented halfway and ineffectively. The most obvious example of this is the Affordable Care Act, commonly known as Obamacare, which has met with such fierce opposition that many of its supporting bills have not passed, leaving the bill a mess which has only compounded problems.

The heart of the problem originates among large pharmaceutical producers, who often artificially inflate prices simply because they can. Little regulation exists in this section of the economy, and manufacturers can overnight raise prices to absurd amounts. Capitalist economics would prevent this, but the aforementioned broken government policies ensure that every citizen can and will buy necessary medication, and so these companies know that if their product works as advertised, patients will buy them at all costs.

An excellent example of this is the case of Martin Shkreli, Founder and former CEO of Turing Pharmaceuticals. His company acquired the rights to anti-parasitic drug Daraprim and overnight increased prices by 5,556 percent. It was perfectly legal, and he later explained that the move was less about profit and more about showing the problems with deregulation, and pointed out that any American could buy the supposedly $800 tablets for only a few dollars thanks to insurance regulations.

It fuels the problem which is ultimately secondary but a much more hotly debated issue: overpriced and privatized health insurance. Health insurance companies must turn a profit, and with price manipulation by both hospitals and drug manufacturers, they must implement exceedingly high rates to turn a profit. It is a more direct cost to most Americans, hence their louder calls to make health care cheaper or free. However, will unfortunately only compound the problem as manufacturers are free to raise prices even more than they do already, as the federal government would cover all costs regardless.

The only real solution or improvement to US healthcare economy can come via regulation on pharmaceutical manufacturers and hospitals. Limits on sale price-manufacture cost ratios could be a viable solution, as well as market regulation on prices of raw ingredients. Ultimately, however, this faces stiff opposition from most major political parties, due to fears of government overreach or sometimes pure corruption. Compared to the small margins of insurance companies, some of which are moving out of health care altogether, these pharmaceutical corporations make new profits as long as they have unique and specialized drugs in their production lines.