With the industry also in fact, faced with diverse issues such as patents lapsing, increasingly intense competition between brand and generic medications, on the one hand, and from biologics, and alternative medicine, on the other, medication withdrawals from the market, and dwindling returns on research and development (R&D) investments, among others, it is indeed, time it overhauled, overall. Yet, the issues need close attention by all parties for the picture to become clear as to which direction this revamping ought to go. In the U.S for example, prescription drug expenditures grew at double-digit rates almost yearly from 1980 to 1999, up to 14.1 percent in 1997, versus the fall in growth of total national health expenditures, hospital service expenditures, and physician service expenditures from about 13 percent in 1980 to less than 5 percent in 1997¹.

Private insurance payouts for prescription drugs grew 22.1 and 18.3 percent in 1995 and 1996, respectively, then 17.7 percent in 1997, for each of which years, overall annual growth in private insurance payments was 4 percent or less. Increased volume, mix, and availability of pharmaceutical products were responsible for most of the prescription drug spending hikes between 1993 and 1997, for over 80 percent in 1997¹. It is also unlikely that we would discountenance the potential to reduce morbidity/mortality, treating specific diseases with the appropriate prescription drugs, just so we would not substitute them for other ‘cheaper’, even if ineffective therapies. Indeed, several studies have not only shown that rational prescription drugs use could reduce overall expenditures, but also improve care quality¹.

Should we also not be seeking ways, thus, to improve doctors prescribing patterns, including promoting the use of electronic prescribing, and indeed, patients’ appropriate use of these medications? Would doctors being able to access evidence-based, decision support at the point of care (POC) including information on indications for medications, their efficacy, adverse effects, even costs, integrated seamlessly into their workflow, hence not compromising efficiency, not help improve patient care simultaneously reducing wastage, hence spending? Would the integration of this system with the patient’s personal health records (PHR), for example not improve patients’ knowledge of their condition/treatment, empowering them, and streamline care with their other healthcare providers able to access the records, granted permission, and within a larger electronic health records (EHR) system?

Another dimension of the pharmaceutical industry is the different roles played by its research and development (R&D) and manufacturing components, and their nature and scope in different pharmaceutical firms, those that mainly produce generic drugs, products essentially similar to the brand drugs with expired patents, more focused on manufacturing than research for example. Thus, firms that spend substantially on R&D would have more financial outlays, on which they expect returns on investment (ROI), lest they lose the drive to develop new drugs, to remain viable. In other words, it would be in keeping with their survival interests to channel R&D funds to clinical areas with significant market prospects, large patient numbers, and/or able/willing buyers, for the resulting products.

Also in the equation are demographic changes, with in some countries, more spending on prescription medications for seniors, and issues relating to employers offering prescription drug plans with higher co-payments, and that favor coverage of the most efficacious medications, and that promote disease prevention, health, and wellness, for that matter. The increased focus on formulary-based practice, and that many health plans now include prescription drug costs in their capitated payments to doctors are also salient issues that affect the pharmaceutical industry vis-à-vis healthcare delivery, and in particular, its costs. Economic indicators, even within a country, such as urban/rural population distribution, gross domestic product (GDP), and employment rates, and indicators of health and well-being for examples disease pattern and prevalence, the distance to a major centre, crime rates, literacy levels, and homeownership rates, among others, are also important market forces that impinge on the pharmaceutical industry.

In informing policy to boost internal competition, and the economy, on the one hand, and point to regional inequalities capable of compromising this goal, on the other, it underscores, the dilemma of the pharmaceutical industry and of society in its perception of and approach to dealing with issues relevant to the industry. It is arguable for example what point is in investing in educational infrastructure, when the kids or their parents spend half the time within a in less-equipped health system, lacking prescription medications to treat even the common cold. Yet, there would probably not be enough funds to fund the educational system adequately with the health system, via soaring prescription drugs costs, gulping a sizeable portion of it. The need for a balanced view in our contemporary knowledge-based economies, where innovation, no doubt tied to education, and a healthy workforce, propels economic growth and development, is therefore, apt.

With regional disparities in educational levels being notable, in France, Australia, the United Kingdom and Canada differences in tertiary educational attainments between the best and worst performing regions more than 30 percentage points, based on a recent report by the Organization for Economic Cooperation and Development (OECD)², the issues are indeed, instructive, regarding prescription drugs, markets, use, and costs. This is more so with, in general, urban regions faring better than intermediate or rural regions, 57% of the OECD adult population with a tertiary education resident in urban regions. The same report noted for example, that concerning access to health care and health outcomes, in about half the surveyed countries, except Austria, Denmark, Greece, and Spain, males living in rural regions were likelier to die prematurely, partly due to the increased fatal traffic accidents rates on country roads.

The implications for health insurance costs, and prescriptions medications use are stark. The report also noted that females in urban areas, on the contrary, were at higher risk, particularly in Austria, Denmark, Japan, and Poland. The report also noted national and regional variations in smoking and obesity rates that would no doubt influence healthcare costs, hence spending, and raise questions on whether in fact, the pharmaceutical industry should bear the blame for soaring healthcare costs, to what extent it should. These statistics also point to what or not should be the focus in addressing healthcare reform in relation to the role that the industry plays in health services delivery, and that it would, in the years ahead, and indeed, the adjustments that the industry needs to make to play that role effectively.

According to the report, Greece, Italy, and Belgium in 2004 had four or more doctors per thousand people, Japan, Korea, Mexico, and Turkey, two or less per thousand, U.S. and Turkey, had extremely high number of doctors based in urban regions relative to the population in these areas, the result, the doctor/population ratio in rural regions, disproportionately low. Spain and Mexico had large regional disparities in the number of nurses per thousand population, and less so in the U.K., and Finland. It is thus obvious, the multiplicity of factors that need considering were the appropriate solutions to increasing healthcare costs that seem not to produce commensurate healthcare delivery quality to become history. Is it any wonder then that way back in 1998, experts warned that any attempt by the British government to crack down on the cost of drugs would result in severe damage to the pharmaceutical industry, and diminish its capacity for innovative R&D endeavors, hence new drug development, and effective patient care?

Yet, would it surprise anyone that government was intent on slashing the NHS’ £6 billion annual drugs bill at the time³? To compound matters, would it, that the Association of the British Pharmaceutical Industry (ABPI) reminded all that any such attempt could scare off manufacturers denting an industry which, after North Sea oil, was the country’s biggest export earner? Unimpressed by government’s declared plans to form a National Institute of Clinical Excellence (NICE) to guarantee the clinical effectiveness of novel medications, which it claimed would focus more on costs than value, the association, on the other seemed oblivious to criticisms by the Institute of Fiscal Studies of the pharmaceutical price regulation scheme. The scheme allowed drug firms to set their own prices for drugs provided they remained within stipulated profit boundaries, again, a potent issue for consideration in determining what role, and to what extent market forces have to play in the future of not just the pharmaceutical, but the healthcare and related industries.

The problems generated by the drug shortage in the UK that the forced closure in 1999 of a major generic drug manufacturer, Regent GM of West London by the Medicines Control Agency, a government body that regulates the safe drugs production, which deemed its products contaminated, illustrate this point⁴. With the firm at the time manufacturing 45% of the UK’s generic drugs, stocks soon ran dry. GPs had to prescribe branded drugs, at higher costs. However, after supplies rose to their levels prior to the closure of the firm, but prices remained high, some even increasing, the prices of more than a quarter of the drugs by at least 50%, some by as much as 700%⁴, reportedly. What happened was the question on every lip, literally, expectedly.

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