IntroductionMA1 In 2016, SaudiArabia’s pharmaceutical expenditure have been estimated to be $6.9 billion withan annual increase by 10%.
Also, pharmaceutical spending per capita is $268 andexpected to rise in 2020 to $400. In Saudi Arabia’s 2030 Vision, the economic growthwas shifted more towards pharmaceuticals. Many factors including aging population, increasing per capitaspending, and the force to purchase patented drugs are driving forces towardsgrowth of drug expendituresMA2 . 1 Drugrelated factors in increasing drug expenditureIncreases in drug prices are pulling attention to an increasein pharmaceutical expenditure on health care institutions.
The ultimate goal ofinnovating drugs is the improvement of patients’ quality of life 2. However, high prices of some drugs that will bementioned lately, can put pressure on healthcare providers and consumers. Inparticular, the cost-benefit should always be the main goal. This means thateffectiveness of drug is a must compared to its cost. The jump in prices can probablybe explained by the cost of development of new agents by different technologies,investing in research, and an eager to return a profit to the pharmaceuticalcompanies 3.MA3 In order to explain the increase in drug expenditure, wefirst should mention some of the expensive drugs used in institutions. First ofall, Hepatitis C virus needs Sovaldi which is used for three months course thatcosts $1000 in a day. So, in total, it costs $84,000 in each course.
Inaddition, some patients may need to take the drug for twice as long or shouldreceive extended drug treatment that adds more to the cost 4. Second, Cystic Fibrosis and one of its medications is Orkambi.Mentioning that CF needs chronic administration of this drug a full year, it costs$259,0005.
Third, high blood lipids especiallyheterozygous familial hypercholesterolemia which mandates a life-long treatmentcalled Praluent, that costs $14,600 per year. Notto mention that this Hypercholesterolemia also needs other medications such asStatins which are fairly high priced. Lastly, Lyrica,used for wide range of neuropathy, has brought $517 billion to the company. Thedrug’s price has raised by 51% in the past three years and one of the causes isof patent extension 6,7,8 These drugsundoubtedly improve patients’ quality of life. Nonetheless they areastronomically costly.
Why drugs costthis much? “Companiesare taking advantage of a mix of laws that force insurers to includeessentially all expensive drugs in their policies, and a philosophy thatdemands that every new health care product be available to everyone, no matterhow little it helps or how much it costs.” Peter B. Bach. There are manyreasons for increasing prices of drugs. Starting with patent abuses and othermonopoly pricing schemes, addressed product-hopping which is intentionallyprolonging drug patents to delay generic alternatives. In turn, this increasesthe cost 9. For example, Actavis tried to pulla very effective and top-selling Alzheimer’s disease drug to switch it with anextended release, a more expensive drug. This act will prolong the patent and,stop generic substitutions.
Another reason is research and drug investment, andmarketing and sales themselves are a costly process that pushes themanufacturer to sky-rocket the prices to have more in return. Pay-to-delay, isa third point in increased drug prices. It is paying to generic drug makers tokeep them out from competing in the market 10. Sometimesno generic competitors enter the market and the prices just never drop. Clearly,product-hopping, willing to have profit, and pay-to-delay are some of thecauses of increasing drugs’ prices.How to controlsuch expenditure on expensive drugs?Expenditure canbe reduced by many ways. For example, from disease related point of view, thepharmacist can evaluate the patient’s need in comparison to the drug price.
Toemphasize, Hepatitis C can induce chronic liver disease. So, it can be managedby reserving Sovaldi to advanced liver disease. Moreover, higher organizations suchas New York State Attorney General should monitor pharmaceutical companies’. NewYork Attorney General upheld the switching action of Alzhiemer’s drug whichrestricted the increase in price. “Unfortunately, schemes to block competition, withoutconsidering the consequences to patients, are a growing trend in the healthcare industry. By standing up to Actavis, we’re sending a clear message to allpharmaceutical companies: Prioritizing profits over patients’ rights will notbe tolerated,” Schneiderman said in a statement 10.
In other ways, pharmaco-economic departments in health institutionsshould look into cost-benefit relationship. To end up, expenditure reduction methodsare various but the role of pharmacist, pharmacy organizations, and the act ofgeneral economic law by NY Attorney General are the main actions discussedpreviously. ConclusionAstronomicprices are for sure a reason to growth is drug expenditure; however, theeffectiveness of drugs and benefit on patients is the main goal for healthinstitutions. Increase in drug prices is one of the reasons for increasing indrug expenditure. Thesky-rocketing prices can be explained by the cost of development of new agentsby different technologies, investing in research, and an eager to return aprofit to the pharmaceutical companies. Why are drugs costly? Product-hopping,willing to have profit, and pay-to-delay are some of the causes of increasingdrugs’ prices.
Methods to reduce expenditure are either to cut-up the price byhigher organizations, or can be at the level of pharmacist by weighing thecost-benefit use.