Average Price Of A Prescription Drug example essay topic

According to PIRG. org, Americans on average pay 102% more for prescription drugs than people in Mexico. Americans are paying too much for prescription drugs. For a long time, money matters have been a matter of life and death. When people are forced to make decisions between buying their prescription drugs and paying bills, free market capitalism has gone too far. The practice of Americans being expected to put up with astronomical drug prices, forced to go to other countries for lower prices, and drug companies making ludicrous profits has to stop. America is no longer the land of the free, it is home to those repressed by greedy over-capitalist corporations who hold in their hands a monopoly on life.

Americans are paying too much for prescription drugs, and to make matters worse, prescription drug prices are on the rise. Prescription drug prices have risen at a rate of approximately four point two times faster than inflation rates (pirg. org). This is much too fast. The average price of a prescription drug is now $45 per prescription (Zhang 1). It does not need to be stated that drug prices need not be rising this fast. Drug prices should rise at a steady rate that is concurrent with inflation; instead they rise at exponential rates whenever their companies are given the chance.

It is the fault of the companies that the prices rise so fast, but it is the fault of the government that it continues to happen unchecked. Without proper government regulations, many companies will do whatever it takes to make excessive profits. If this means monopolizing or other immoral business practices then it will be done. Everyone is affected by the rising prices, especially those on Medicare. People on Medicare, who make up 13 percent of the population but use 39 percent of the drugs, now pay an average of over $1000 a month on prescription drugs out of their pocket (Zhang 1). Drug companies spend big money, $18 million in the last election, to get who they want into political office.

Who they want, as far as most of their spending goes, are members of the Republican Party. While for many this is a partisan issue, it should not have to be. When an issue is as one sided as this, partisan politics should not need to be involved. The only reason that the big drug companies want Republicans in office is because they are lenient on big corporations. Needless to say, drug companies are very big corporations. These are not easy times for Americans as far as insurance goes either.

Because 70 million Americans are without proper drug coverage, people are affected by the higher drug costs (pirg. org). When looking at the 240 million Americans, roughly 29% of them do not currently have adequate prescription drug coverage. This, in combination with the raise in drug prices, can mean big financial problems for people in America. In comparison to the $45 average price for a prescription Americans pay, a price of $22 on average in Mexico is a blatant problem.

If ever there was proof that American drug prices could be lower, it is evident in the fact that people in other nations are paying less for prescription drugs than people in America. Other nations that don't have America's lenient patent laws, such as the Hatch-Waxman Act do not have as high of drug prices as the now quite corporate friendly America (Zhang 1). Prescription drugs cost 72% less in Canada than in America. This fact in and of itself may not seem all that ground shaking but when added to Canada's nationalized healthcare system, it makes the situation quite different.

Canadian people are better cared for by their government. Canadian people don't need to worry so much about prescription drug prices because they know that their government cares about them. This is the reason that prescription drug prices are kept lower in Canada. The government of Canada does not want to have to pay over-inflated costs for the drugs its people need and so they work to have their prescription drug prices lowered. In America these costs are merely passed on to the people who buy the drugs, the citizens. Drug companies are huge corporations that make massive profits by overcharging their customers.

The combined profits of the top ten American drug companies exceeds $24 billion (pirg. org). Of the makers of the top 50 drugs on the market, the median net profit is 20%. Compare this to the average median net profit of 4.4% for all fortune 500 companies, and it shows they are making 4.5 times more than most companies. This is profit, too. It is not profit before overhead, or profit before taxes, this is net profit after expenses (pirg. org). These are vast profit margins.

Again, these companies are allowed to make these colossal gains at the expense of America's people. Drug companies must be regulated because they raise prices to make massive profits. Prescription drugs are too important for people to go without, and the drug companies have proven themselves untrustworthy for too long. A healthy profit is needed for any business, that is understood, but with profits above 20% on a necessity manufacturer, something is desperately wrong. The other option to curb the huge profits made by big drug companies is to stimulate competition by changing the patent laws for drugs.

Most patents last 20 years. At the end of that time the patent on a new product expires and the door is opened for similar products. Prescription drugs should not follow this rule. Prescription drugs are too necessary for people for this rule to be able to take effect. Plus, if patent protections were shorter for prescription drugs, it would mean that drug companies would be forced to put new money into research and development or else face the problem of having their biggest sellers suddenly being undersold by generic brands. Nationalized health care, and curbing profits may on the surface seem to be anti-capitalist, however they are quite the opposite.

Capitalism thrives on competition, not on super businesses that rule each sector of their respective markets. The current system favors the established and large conglomerate over the new upstart company. If this were truly a free market, neither would be favored, which would give the best chance for success. Some claim high drug prices are caused by the companies using large amounts of money for research and development.

This is not true. In 2000 alone, big drug companies spent $8 billion on advertising. In fact, of the five firms with the highest revenues, four spent at least twice as much on marketing, compared to research and development (Kennedy 1). Often it is brought to the people's attention that drug companies have to make a profit to survive.

That is true, companies must make profits in order to survive in a capitalist system, but no one can argue the fact that Pfizer, a major American drug company, has one of the most lucrative portfolios in modern American stocks. Few other major drug companies lack this attribute. Also it is stated that patent laws protect the makers of new drugs. This argument is somewhat valid. However, the original patent laws were meant to promote competition by forcing companies to create new products. Today these patent laws are used to create monopolies; each drug is completely different from other drugs.

Some drugs may cure some diseases, but other drugs in the same category may not do the same. The patent laws were not meant for the purpose for which they are being used. When Colt Firearms patented the revolver in 1836, other firearms were still available. For drugs it is not the same. Different drugs often cannot do the same job as each other. Drug companies make massive profits from the pain and suffering of their customers, and it has to stop.

For proof that there is a better way, we need look no further than our northern neighbors in Canada. American drug companies need regulation, but for years, it has not happened. With an economic crunch now being felt by every American, especially our senior citizens who depend on an over-worked and under-funded social security program, it is now more important than ever that prices be lowered. It is not too late however; and if Americans work for it, they will be able to see lower drug prices within the very near future.

Bibliography

. Ed Kennedy. Speech to congress on Prescription drug prices. Washington DC, 2000. Senate records. Available: web Zane Zhang: Rising prescription drug prices: Corporate greed or costly research? The Spectrum. Available: web Public Interest Research Groups. Prescription Drug Reform. Available: web.