Pharmaceuticals Industry
Political and Social Context of Innovation
Where Pharmaceuticals are Today
Components of Pharmaceutical Innovation
Demographics
Social institutions
Cultural Beliefs
Economic Forces
International Relations
This paper covers the background and development of the pharmaceutical industry in the United States. It will cover the social facts and institutions, political actors, economic forces, environmental realities and, most important, the demographics and income levels which have driven pharmaceutical innovation in the United States.
Where Pharmaceuticals are Today
Healthcare expenditures today have become a major segment of all developed economies. In the United States, over 15% of GDP, or over $2 trillion, is spent on healthcare every year (Pear, 2004). This is significantly higher than other developed countries: in the European Union, the average is 10% of GDP (Economist, 2007). A great part of the expenditure — and profits — in our healthcare system go to the pharmaceutical industry, which accounts for $300 billion, or 15%, of the total healthcare expenditure in the United States (Economist, 2007).
The key issues for this nation with the pharmaceutical industry are as follows:
While accounting for 15% of total healthcare expenditures, over 50% of profits go to the pharma companies.
The cost ($800 million) and time (13 years on average) from inception to regulatory approval by the FDA impose a significant barrier to faster and better introduction of drugs.
The rising need due to an aging population collides with the increased costs, which have not been addressed on an outpatient basis by Medicare (for patients over 64) or by private or public insurance for those under 65.
The U.S. accounts for half of global pharmaceutical expenditures, despite being only 5% of the world’s population. Drug prices in the U.S. are higher than any other country in the world. Should Americans continue to pay the costs of drug development for the rest of the world?
Pharmaceutical companies today are facing a dearth of new products to replace current product revenues, challenges to patent situations, and a diminishing number of multi-billion dollar markets for new drugs. The future will require more targeted approaches, more specific disease focus, and shorter, less-expensive development cycles.
Components of Pharmaceutical Innovation
Demographics
The age group over 65 is the fastest-growing segment of the U.S. population (Bureau, U.S. Census, 2001). The U.S. has more people over 65 than any other country other than China. This fact of a large and aging population is important to medical care because older people use much more health care than younger people. From age 50 to age 60, for example, the average expenditure per person increases by a factor of 7 (Reinhardt, 2000).
The correlation between age and health care expenditures in the 30 OECD countries is illustrated in the following graph (Reinhardt, 2000):
Social institutions
Healthcare was provided by private means through to the 1960’s. The coming of the Great Society ushered in Medicare and Medicaid, which started by supporting the medical expenses of seniors (65+) and those in the bottom 20% of the income level of the United States.
Private healthcare insurance began during the 1940’s, during World War II. At that time, wage controls made it impossible for companies to offer higher salaries, so they offered healthcare insurance as an inducement. After World War II, it became common for most Americans to receive their healthcare through their employer. With nearly full employment and long careers at the same company, healthcare was generally a non-issue for most working or retired Americans.
This relationship began to break down in the 1980’s, as healthcare expenditures soared (therefore giving impetus to companies to reduce healthcare costs), and workers began to move to different companies more often. if, in the meantime, the worker’s health preconditions changed, it could be difficult or impossible for that person to retain health coverage.
The FDA was created in 1966 as a result of the Thalidomide birth defects scandal. The FDA’s charter was to insure that drugs were “safe” and “efficacious.” Although the first goals were fairly modest, the FDA has now turned into a formidable barrier to entry of new drugs and medical devices.
Although many individuals with untreated illnesses are willing to take the risk of taking a new drug, the mandate of the FDA to “prove” safety results in a significant delay from the time of inception to final introduction on the market. The debate in society is: drugs faster with lower safety, or drugs safer with perhaps thousands dying untreated? The typical answer in the U.S. is a muddle — fast-track for those drugs which are able to get through politically, with a slow shuffle for the rest.
Cultural Beliefs
The U.S. uses more drugs, does more procedures, and tries to prolong life more than any other developed country. The U.S. performs 4 times the number of hysterectomies as other developed countries, 4 times the number of cardiac interventions (surgeries and angioplasty), and 8 times the number of breast removals or lumpectomies for cancer as compared to Europe.
The first response in the U.S. is to “do something, anything.” This is not the case in the UK, for example, which spends only 1/2 the amount per capita as the U.S. On health care (Economist, 2007). In the UK, the first thought is “do nothing,” while in the U.S., it is “do anything.” The result? Overprescription of pharmaceuticals.
The second cultural phenomenon in the U.S. is that 60% of all lifetime health expenditures hear are made in the last year of a person’s life. That is because in the U.S., unlike other developed countries, patients and their families are willing to undergo heroic measures to prolong life, even if for a few days or weeks (Hoover, 2002). While only 5% of Medicare patients die in any one year, costs hover around 30% of all Medicare expenses for those few patients.
Pharmaceuticals play a key role in extending life, even for a short period of time. One only need look at the drugs needed for each of over 5 million CHF (congestive heart failure) patients to see how much a typical senior must spend on drugs; these can include beta blockers, statins, diuretics, anti-platelet agents, aspirin, and anti-depression drugs.
Economic Forces
Pharmaceuticals exist in a competitive environment. The first healthcare decision is: does this patient receive any care at all? Pharmaceuticals are generally the first line of healthcare in a continuous path from drugs to in-hospital care to surgery to more drastic measures (like radiation for oncology).
Pharmaceutical companies have relied in the past on “blockbuster” drugs which provide tremendous sales and profits. Pfizer, which sells Lipitor, had $12 billion of sales for that drug alone — the largest sales of any pharmaceutical product worldwide.
Now, faced with Lipitor off patent and other statin drugs from competitors, Pfizer is facing a problem of how to replace that blockbuster drug. Given the high costs and time, Pfizer has few good choices (Herper, 2007).
International Relations
The U.S. protects the pharmaceutical industry by paying high prices and insuring — through several methods — that it is difficult for Americans to import drugs from other countries where drug prices may be lower.
Since the U.S. is largely a private-insurance country, there is a sort of free market for pharmaceuticals. Medicare sets prices through the CPT mechanism, but the prices for new drugs which are set by Medicare, and observed by other third-party players, are high as compared to other countries.
Part of the reason that U.S. prices are higher than elsewhere is that the government takes a much larger role in other major OECD countries, such as France, the UK, Canada and Germany. In those countries, the health ministry negotiates and publishes prices — generally much less than those in the United States. In developing countries, such as Mexico, a larger private-pay market and low incomes dictate that local branches of the pharma companies charge lower prices in order to stay in the market.
There are two constant irritations in U.S. pharma companies’ relationships internationally:
Some developing nations, such as India, Brazil and South Africa, are chipping away at the patent situation, trying to shorten the time until the drugs can be brought out in generic form.
The U.S. has supported high prices as the cost for innovation. Since other countries are not playing along, this means that their citizens are benefiting from the innovation paid by Americans.
Conclusion
Big Pharma is at a crossroads today. The previous “great” chronic diseases, like diabetes, heart disease, infectious disease (viral and bacterial) have now been tackled by “blockbuster” drugs.
The high regulatory pressures, price pressures and lack of future such blockbuster markets dictates that pharma companies will have to innovate a lot more in niches — more products, smaller markets. The large pharma companies which grew up in a time of plenty will therefore have to radically change how they do business, from increasing acquisition (which doesn’t always work), cooperative agreements, exemptions from regulatory approval, and other such measures.
At the same time, pharma companies must find a solution to work with fast-growing, important developing markets in such a way that innovation can still be paid for, while the developing countries get the drugs they need. A good precursor for this is anti-retroviral drugs against AIDS in Southern Africa. Realizing that they could not use patent law to enforce their claims, most big pharma companies came to an understanding with the governments which met everyone’s goals.
Bibliography
Bureau, U.S. Census. (2001). An Aging World. Washington, DC: U.S. Census Bureau.
Economist. (2007, October 25). The Pharmaceutical Industry: Beyond the Pill. Economist, p. n.p.
Economist. (2007). World Atlas. London: Economist.
Herper, M. (2007, October 29). Drug Drought. Forbes, p. n.p.
Hoover, D.R. (2002). Medical expenditures during the last year of life: findings from the 1992-1996 Medicare Current Beneficiary Survey – Cost of Care. Health Services Research, n.p.
Pear, R. (2004, January 9). Health Spending Rises to 15% of Economy, a Record Level. New York Times, p. n.p.
Reinhardt, U.E. (2000). Medicare: Its Financing and Future. Health Affairs, n.p.
Pharmaceuticals Industry
Get Professional Assignment Help Cheaply
Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?
Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.
Why Choose Our Academic Writing Service?
- Plagiarism free papers
- Timely delivery
- Any deadline
- Skilled, Experienced Native English Writers
- Subject-relevant academic writer
- Adherence to paper instructions
- Ability to tackle bulk assignments
- Reasonable prices
- 24/7 Customer Support
- Get superb grades consistently
Online Academic Help With Different Subjects
Literature
Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.
Finance
Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.
Computer science
Computer science is a tough subject. Fortunately, our computer science experts are up to the match. No need to stress and have sleepless nights. Our academic writers will tackle all your computer science assignments and deliver them on time. Let us handle all your python, java, ruby, JavaScript, php , C+ assignments!
Psychology
While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.
Engineering
Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.
Nursing
In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.
Sociology
Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.
Business
We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!
Statistics
We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.
Law
Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.
What discipline/subjects do you deal in?
We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.
Are your writers competent enough to handle my paper?
Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.
What if I don’t like the paper?
There is a very low likelihood that you won’t like the paper.
Reasons being:
- When assigning your order, we match the paper’s discipline with the writer’s field/specialization. Since all our writers are graduates, we match the paper’s subject with the field the writer studied. For instance, if it’s a nursing paper, only a nursing graduate and writer will handle it. Furthermore, all our writers have academic writing experience and top-notch research skills.
- We have a quality assurance that reviews the paper before it gets to you. As such, we ensure that you get a paper that meets the required standard and will most definitely make the grade.
In the event that you don’t like your paper:
- The writer will revise the paper up to your pleasing. You have unlimited revisions. You simply need to highlight what specifically you don’t like about the paper, and the writer will make the amendments. The paper will be revised until you are satisfied. Revisions are free of charge
- We will have a different writer write the paper from scratch.
- Last resort, if the above does not work, we will refund your money.
Will the professor find out I didn’t write the paper myself?
Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.
What if the paper is plagiarized?
We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.
When will I get my paper?
You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.
Will anyone find out that I used your services?
We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.
How our Assignment Help Service Works
1. Place an order
You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.
2. Pay for the order
Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.
3. Track the progress
You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.
4. Download the paper
The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.
PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A PERFECT SCORE!!!
