2018
American Journal of Humanities and Social Sciences Research (AJHSSR) American Journal of Humanities and Social Sciences Research (AJHSSR) e-ISSN : 2378-703X Volume-02, Issue-05, pp-50-60 www.ajhssr.com
Research Paper
Open Access
International Drug Price Comparisons Review of Pharmaceutical Price Regulation: National Policies Versus Global Interests Chihiro Iizawa International University of Health and Welfare Graduate School December 30th 2017
I.
DRUG PRICE EACH COUNTRIES
Translational pharmaceutical industry implies potential maximize stockholder equity. Even though drug regulation is getting stricter, the regulation cannot control the total drug expenditures as seen in the empirical evidence. Making balance between controlling health care spending and maintaining motivations for novel R&D would improve health and quality of life. The regulation of each country reveals a synergistic interaction between costs, pricing, spending, R&D, productivities, and trading in global economies. The international competitors focus on their exchange rates instead of regulation concern and consumer’s purchasing powers.
II.
DRUG COST AND PRICES IN THE UNITED STATES
Drug prices are regulated in each country. For instance, President Clinton’s Health Security Act regulates that market driven control by managed drug benefit programs become rigid in private insurance plans. Each country faces strategies with gathering global drug budgets, controlling drug volume, and total spending.
III. THE ECONOMICS OF PHARMACEUTICAL COSTS AND PRICING IN THE UNITED STATES The R&D costs per NCEs brought to market in the United States was $59 million before taxes, and $194 million after taxes in 1993.On the drugs ranked by the FDA, higher input costs are utilized mainly for innovations. The R&D share of total costs, which includes joint costs, and increasing the issues on drug prices by global users. Production and distribution accompanies significant costs to serve several countries. The capital costs of each plant and distribution network cannot be accounted for precisely in products sold in that country. The issues of pricing on present costs and the profit maximization strategies are exist. A. Patents as Means of Recouping R&D Costs Patent protection extended to 20 years for drug patents as opposed to those issued before 1984, which expired 17 years from the filing. (Sibbald.B, 2001). The patent protections ensure that innovators have adequate income from their efforts. Innovators can add prices onto marginal costs. B. The Economics and Politics of Drug Price Regulation Drug prices are attributed to government regulations and relevant insurance for outpatients’ drugs. Many pharmacists tend to prescribe drugs for financial gain, thus they prefer to have patients visit more often. Consequently, they reimburse costs on a fee-for-service. “Moral Hazard Effects”, which address over-utilization of insurance covers, and create a limit of insurance coverage. The economic theory designates that the obstacle of “moral hazard” applies to the case of consumers who paid for long-run interests and overuse of insurance because it extends their premium. C. Optimal Pricing to Share Joint Costs Ramsey pricing is charging all users high, inelastic prices with relevant, elastic consumer demands. For instance is since the demand is inelastic, firms can price at an arbitrary level. The consumer's purchasing power is based on income, and third-party payers on reliable medical care systems, conveniences, and possibility of the risks.
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