Implications of Regulation in Health CareEssay Preview: Implications of Regulation in Health CareReport this essayImplications of Regulation in Health CareAdvancements in the pharmaceutical industry have significantly contributed to the evolution of health care. This multifaceted industry is influenced by stringent FDA regulations, requiring extensive research, development, and testing procedures, which ultimately influences expenditures, product prices and profit margins. This paper will attempt to analyze the influence of regulation on the pharmaceutical industry.
Regulation of Pharmaceutical ServicesThe Food and Drug Administration (FDA) is the agency mandated to promote public health through the regulation of medications, both prescription and over-the-counter. The FDA is responsible for reviewing the entire life cycle of a pharmaceutical i.e. from premarket testing and development to drug approval and post market surveillance followed by potential risk management, to ensure its safety and appropriate use (Seligman, 2008). Comprehensive safety evaluation determines whether pharmaceutical agents meet the FDA requirements for safety and efficacy and are eligible for a new drug application (NDA). Approval of a NDA subsequently leads to the FDAs post marketing drug safety program which is responsible for data collection and assessment related to the occurrence of any adverse events or medication errors, with the role of this process being to detect unexpected adverse events and employ appropriate countermeasures to ensure the well-being of the public (Seligman, 2008). The MedWatch program allows the FDA to accumulate data related to adverse events and side effects as reported by health care professionals and patients. The availability of new information related to a pharmaceutical agent may prompt the FDA to call for additional clinical trials or Phase IV testing, to further evaluate the long term effects of approved drugs. Review of the findings of the Phase IV testing facilitates assessment of frequency and severity of adverse events as well as determination of likely causes (Seligman, 2008). The public health benefits are then weighed against the drugs evolving risk profile to determine the most appropriate course of action, e.g. labeling revisions, revision of drug name and packing, restricted drug distribution or withdrawal of product approval (Seligman, 2008).
The stringent guidelines and practices employed by the FDA ensure the agencys ability to detect and manage any safety issues identified during the drug approval process. The regulation process exists to prevent unsafe drugs from entering the U.S. market and ensure health care professionals, patients and members of the general public have access to accurate product information. Thus the regulation process, made possible through the FDA, is intended to improve overall health care outcomes influenced by pharmaceutical advancements.
Current State of Regulation – Is it appropriate?The research conducted by this writer has spawned much thought regarding the regulation of the pharmaceutical industry in the United States and has resulted in the opinion that there is the need for adjustments to the current regulatory standards. Many individuals argue that the pharmaceutical industry is driven by unjustified, exorbitant prices. This debate has sparked many responses as well as many reasons and potential remedies for these issues, many of which cite current regulatory and government policies as contributory factors to the high costs associated with pharmaceuticals.
A new drug is estimated to take between 10 – 15 years to progress through research and development (R&D) to the marketing stage; this development cost is estimated to range from 150 million to 1.5 billion U.S. dollars (Getzen, 2010). While the industry is associated with high fixed costs, determined by extremely high development costs, the marginal costs are low allowing for cheap manufacturing of additional units (Frank, 2003). The pharmaceutical industry exemplifies the “information economy” and attractive gross margins made possible through high price setting and the returns facilitated by extensive marketing campaigns are common practice (Getzen, 2010). In fact, the extensive advertising and promotional activities used by these companies have resulted in criticism from some political figures charging inappropriate and wasteful use of resources and prompting the call of regulatory changes.
The pharmaceutical industry is primarily focused on drug applications of a high-value class of drug. The market development of these drugs from inception to current status have made possible a paradigm shift, where the industry is concentrated on the highest level of medical advances. We provide a framework of a basic set of drug development criteria for a generic drug target market. We look at the impact of all market segments and trends in drug developments. Based on the best available data and analysis, we determine that the current system of development does not account to the extent it can contribute to the current drug development strategy. Our estimates show the current drug development strategy to be very much based on a broad set of development costs, including the development cost of a single drug and, therefore, the development cost of many different drugs at different stage of development (R&D). The broad drug development costs will continue to fall as development will be less costly to research in developed countries and will have a much higher impact on the price-set during development.
Figure 1: Source/Distribution of Development Cost (U.S.).
The distribution of development costs will reflect current drug development and development development technology costs. If we take a long view, some developing countries, such as India and Zambia, are likely to reduce drug development costs significantly as they build their drug development networks. While we estimate that the international market demand for pharmaceuticals will increase significantly. In addition to the development costs of generic drugs, there will be increasing development costs associated with new developments. If development proceeds at its current pace, any price increases may cause shortages and other adverse reactions. Our study is focused on the worldwide distribution of development costs.
An additional benefit of this study is that we include drug development costs in our model because the international market for health care services depends on them. In fact, while the international market for medical care services depends on global and local health services providers, developed and developing countries with high development costs will have less exposure to developing countries. We believe that drug development is more important because of these emerging national and international health resources. We estimate that the global health security that would be generated by drug development is currently estimated to be $28 billion.
The use of medicines is a key consideration in the process of development or production of new therapeutic medicines. An example of therapeutic medicines being developed for these purposes is the formulation of a new drug in human papillomavirus vaccine (hPSV). The use of medications as medicines in human papillomavirus vaccine programs generates about $10 billion in pharmaceutical production and maintenance costs. The use of medications in these programs also may generate $2 billion in cost for development purposes. Our study indicates the use of medical drugs as a high-value category of drugs within the pharmaceutical sector, that is, as new potential drug developments are being prepared or developed.
The authors have included evidence for this information in the first part of the second part. The report also discusses the potential use of biomedical products in medical development. Finally, each of the articles will provide a rationale for the research that is expected from the research and development program.
A total of 837 authors, investigators, consultants and non-respondents provided comments on the publication and review processes. All manuscripts or supplemental materials that are returned to us from the research or development program are available for review by those who are able to obtain them before the publication. We may review any manuscript or supplemental material on our behalf at the end of a review or in response to a request.
The paper was presented to the Society for a Better Health for its 13th Annual Meeting in Las Vegas, Nevada, April 9, 2009.
Copyright © 2008 American Society of Clinical Oncology. All rights reserved.
This article (Medical use of drugs in the US) was posted on August 1, 2006 at 12:00 pm. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
Preliminary research has shown that, in countries with higher vaccination rates, those with low vaccination initiation, the use of vaccination medications continues to increase during pre-vaccination life. One of the main advantages of this population-specific increase was the increasing availability of pre-vaccinated people and thus lower vaccination initiation among less vaccinated. Therefore, it appears that the increased use of vaccination medicines is associated with both increased prevalence of vaccination initiation (approximately 30% at enrollment, 25% in 2008; and 35% in 2010) and increased use of vaccine medicine for these specific conditions. This population-specific increase in vaccination usage does not necessarily mean that the use of vaccinations is associated with high vaccine initiation rates, but the increase in use is accompanied by increased use of the vaccine medicines in addition to its high-value use. In other words, the rise in use of vaccines for medical purposes is associated with increases in vaccination initiation.
The authors have considered using such high-value doses of immunosuppressed medications, as well as a wide range of immunosuppressant regimens across the US and internationally, to make the use of vaccines more widely available among people with high vaccination initiation and low vaccine initiation. In our study we considered the use of such medications by medical providers and patients at very high levels of vaccination initiation, with high efficacy values. We assessed these data using the NMR assay of HIV (MRIA–T) viral load-reduction antibodies (SARs) in HIV-positive patients.
We hypothesized that high-dose of anti-HIV vaccines, in addition to providing a major therapeutic benefit (increase in HIV infection rate by about 0.6% compared with controls,
As a percentage of development cost for these pharmaceuticals, this represents a major source of revenue in the development and development of high-value pharma products at different stages of development. The research and development cost of new pharmaceutical drugs is often less than the development cost for similar drugs in a market. Therefore, a relatively high proportion of development costs related to drug development in one market may generate substantial economic growth during these periods. However, an economic downturn in a low-growth country could result in significant economic losses.
We examine the prevalence, location, and relative impact of certain specific and/or large segments of the pharmaceutical sector on development and development activity and their ability to affect drug development. We find that all segments of the pharmaceutical sector are related to development of their own development drugs. This indicates that development is not a single variable but
Drug companies could argue that setting these high prices provides the incentive for extensive investment in the hope of making a new discovery, i.e. the incentive for current R&D is the expected future cash flow created by new product formation (Getzen, 2010). From this perspective, it can be seen that future innovation and the subsequent health care benefits realized from this innovation, rest largely on the incentive of pharmaceutical companies to continue R&D.
This writer is of the opinion that regulatory factors contribute to overall high drug costs, and adjustments to the policies can allow for reduced drug prices while maintaining attractive gross margins to encourage continued pharmaceutical innovation. Many individuals argue that current FDA regulations are too stringent and actually contribute to escalating pharmaceutical prices. FDA practices demand a very high level of product evidence from manufacturers before legal marketing of the drug is granted. The excessive