White Paper: A Critical Analysis of Rising Prescription Drug Costs in the United States and Its Impact On Affected Constituencies

Please see the attachment for my White Paper

Stakeholder-Final White Paper-U.S. Pharmaceutical Drug Pricing-


Executive Summary:

This White Paper is intended for lawmakers, health insurance providers, pharmaceutical companies, and other constituencies throughout the pharmaceutical supply chain who are impacted by the consistent rise in drug costs throughout the United States. It provides a detailed and thorough analysis of this complex issue, identifying the major problems driving the price increases, providing a comparative analysis as to why the United States consistently pays much higher prices for drugs than other countries in the developed world, and analyzing the various methodologies and rationales behind the pricing of pharmaceuticals. This debate is quite contentious and involves a number of complex issues from the incessant focus on raising revenues seen by many important players within the pharmaceutical industry to new uses of old drugs and rising prices of both generic and specialty drugs. As many countries in Europe have government-operated health systems with significantly more negotiating power than Medicare and Medicaid, drugs are much more affordable to residents of these countries. Additionally, many of those countries with more competitive pharmaceutical prices than the United States operate using a reference price system, in which drugs with similar effects are grouped into classes, each of which has a single price. In addition to reference pricing, other criteria by which drugs are priced include Quality Adjusted Life Year (QALY), as well as Average Sales Price (ASP), and Average Manufacturer Price (AMP). Various policy initiatives have been proposed to curb this increasingly important issue, including creating more competition within the industry, legally requiring drug companies to spend a certain percentage of revenues on research and development, as well as price controls and permitting importations of drugs from Canada and other countries. The following pages discuss each of these issues in detail and are accompanied by a number of figures and tables to supplement and visually display much of the presented information.


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