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Why U.S. Drug Costs Are Out of Control

March 15, 2016 // News

drug-money-costsIn his New York Times article “New Dosages of Old Drugs are used to Raise Their Prices,”

Barry Meier addresses the controversial trend in the drug industry in which newly manufactured dosages of common drugs are being introduced into the marketplace to circumvent cost controls.

The ulterior motive?

Egregious markups, whose resulting profits end up in the hands of manufacturers, middlemen, and the doctors who dispense them, despite the fact that there is no proof that the new dosages provide a greater health benefit. Consumers and business owners are affected by this practice as rising drug costs raise premiums for individual health insurance, group medical insurance, and workers compensation coverage.

While huge markups in the pharmaceutical industry are not uncommon, there is mounting concern among regulators over two issues; the extreme measures taken by drug companies to gain profits, and the exponential growth of doctors dispensing these new drugs for the profit.

Another emerging issue is that of wasted medication. Researchers at the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center recently published a study showing a disturbing trend; billions of dollars’ worth of drugs are thrown away every year due to vial size packaging.

That study found that up to 37% of the top 20 cancer drugs end up in the trash because a single patient does not use the full amount of medication typically included in a vial.  While insurance companies pay for this waste, the consumer is the ultimate loser as the cost is passed on in the form of higher drug costs.

 

 

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