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About Precription Drugs

Wednesday, June 17, 2009

Related Tags: prescription | drugs | medicare | cost | medicaid

Instructions

Utilization

Step 1:
The use of prescription drugs in the United States is steadily rising. In 2005, 59% of Americans under age 65, and 91% of Americans 65 and older, claimed a prescription drug expense. To exert some sort of regulation on the utilization of prescription drugs, health plans exclude certain drugs from coverage, increase cost sharing and impose limits on quantity dispersal. The dissemination of prescription drugs through certain government agencies and federally approved organizations like the Department of Veteran Affairs and the Public Health Service fall under a program called the Federal Supply Schedule which allows these groups to utilize prescription drugs at lower costs than non-federal distributors.

Drug Costs

Step 1:
The overall cost of prescription drugs can be affected by many factors including manufacturers and market competition. Much debate surrounds the role of government in supplementing rising healthcare costs for low income families. Since prescription drugs represent the largest area of spending in the healthcare industry, the cost of these drugs is especially important. The prices for prescription drugs increased at about the same rate of 3.5% for both 2005 and 2006. However, this figure is down from an average of 6.9 % in previous years. This is primarily due to importation from other countries and the improvement of Medicare and Medicaid programs.

New Drugs

Step 1:
When new prescription drugs arrive on the market, overall spending is affected. If the new drug serves as a replacement for an older, less expensive drug, or treats a condition not previously covered with drug therapy, drug spending can increase. If the new drug is cheaper to produce or treats a number of conditions simultaneously, the cost of prescription drug spending is drastically reduced. The US Food and Drug Administration (FDA) has fluctuated in the past decade in terms of new prescription drug approvals. In 1997, 39 drugs gained FDA approval while only 18 new drugs were approved in 2006.

Generics

Step 1:
Approximately three quarters of all FDA-approved drugs have a generic equivalent on the market. New, low cost generic substitutes give name brand producers increased competition and lower the cost of prescription drug spending. This fact has been acknowledged by the Food and Drug Administration in recent studies. For products with a large number of generics, the average generic price falls to 20% of the original branded price.

Insurance Coverage

Step 1:
Coverage for prescription drugs can come from a number of sources, both private and public. The principal source for health insurance in the U.S. comes from employer coverage. 98% of workers covered under employer plans receive prescription drug benefits. The federal health program for the disabled and elderly is called Medicare. Under the Medicare Prescription Drug, Improvement and Modernization Act of 2006, Medicare outpatients can now apply for private prescription drug coverages. The Department of Health and Human Services (HHS) shows that approximately 90% of Medicare beneficiaries now have prescription drug plans as of January 2008. The primary source for outpatient pharmacy services to low income families is through a joint federal and state program called Medicaid. All states have Medicaid programs that cover prescription drugs but policies differ from state to state in regard to co-payment and preferred drugs made available. Contrarily, the cost of prescription medicine for the uninsured can be astronomical. An April 2008 survey found that uninsured adults are more than twice as likely to lie about filling prescriptions, cut pills, and skip dosages because of the cost.

Imported Prescription Drugs

Step 1:
The importation of prescription drugs into the U.S. from Canada and other countries is technically against the law. However, due to the high cost of domestic prescription drugs, people are traveling abroad for their medication. Direct buying in Canada and Internet sales generated 700 million dollars in 2003, which is 0.3% of the total U.S. prescription sales. Although the law allows U.S. residents to transport up to a 90 day supply of prescription drugs from Canada to the U.S., law enforcement is notoriously lax against abusers of the mandated allowance.

Prescription Drug Abuse

Step 1:
A cause of great concern among kids and teenagers is the abuse of prescription drugs. Most young people who abuse prescription drugs view them as safe because they are created in regulated laboratories. According to a 2008 statistic by StreetDrugs.com, prescription drugs were the second most accessible drug to teenagers. Prescription drug abuse can have fatal consequences and addictive potentials comparable to the hardest street drugs. Some commonly abused prescription drugs are stimulants like Ritalin, Dexedrine, and Meridia. Designed to treat ADD and ADHD, these stimulants can cause euphoria and acute paranoia when misused. Oxycotin, Valium, and Xanax are also commonly abused and are especially addictive.