Health Care & Medicine - Higher Cost to Community
We are aware that pharma industry is growing at a rapid pace in tune with increase in demand for medicines, close to one trillion USD (approx.) in sales according to business reports. In the last two decades, the industry had witnessed mergers of big players consolidating their businesses. The industry is still in consolidation mode. Hospitals, clinics and test laboratories have also seen exponential growth during this time. And so, the diseases.
Diabetes, blood pressure, heart disease and related disorders have taken a toll on all of us. The costs of medicines and hospital treatment have become very steep to the reach of common man.
Why are costs high? - Branded medications require an average of 12 years of R&D, which is not required of generic medicines. Branded medicines are patent protected globally and therefore innovators enjoy a virtual monopoly till expiry of those patents. These patents prevent generic manufacturers from entering the market till the brand drug is off patent (20 years patent protection in most countries). Generics are low cost alternatives.
Apart from input and manufacturing costs, major part of higher costs has direct relation to brand acquisition or consolidation costs, selling and marketing costs besides R & D expenditure. The impact of high costs of medication on general population therefore needs no more exposure.
Some governments run social security and health care schemes including subsidies and grants which are funded by tax payer. Some adopt free medication schemes as populist measures in line with their manifesto. These are due to social or political compulsions. In some countries, public insurance or social security can rarely cover the high costs of branded medication or treatment.
Insurance companies also play their part, undertaking health risks at a premium although private insurance is a privilege for a small section of the population. Donor funding, industry contributions make up the rest. There is also size-able private spending which is not supported by government or insurance. There is more to our thoughts ........................