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Published:September 3rd, 2005 08:30 EST
Prescription Cost Containment

Prescription Cost Containment

By Inactive Writer

One of the nation`s most profitable businesses today is the pharmaceutical industry. With the absence of price containment for prescription drugs in the United States, consumers may have to pay as much as three times more than consumers in other countries. Someone without insurance is unable to afford prescription medication, while individuals with insurance are paying higher co-pays and premiums. Many groups agree that only with new legislation will the issue about accessibility to medicine can be addressed, and prices be contained.

The Medicare program implemented in 1965 did not include a prescription drug benefit. The reason for that was simple: four decades ago the use of medicine to treat illnesses and the demand for brand name medicine was not the same. After 1980s, the popularity of brand name drugs increased due in part by cutting-edge research added to patent extension legislation, and in part by marketing campaigns. The first allowed drug makers to grow a profitable business with less taxation since research is supported by tax-breaks and patent extension impeded generic medicine to be made available resulting in less competition. The second allowed the brand names to reach the general public with advertisements.

Because of the lack of medicine coverage for Medicare, senior citizens--the largest consumers of prescription drugs-- awaited for legislation to make medication more accessible. Although the pharmaceutical industry has been an opposition to the implementation of a cost containment system or addition of a drug benefit to Medicare, the drug coverage issue has been a pressing matter in President Bush`s administration.

Recently, a new Medicare plan has been announced by President Bush. Now, Medicare s beneficiaries can choose different plans based on income levels with an estimated monthly premium of $32. In a recent meeting with a group of senior citizens in Arizona, Bush advocated for the new prescription drug program that will start on January 1, 2006.

He also requested involvement of young family members to assist seniors in completing the four-page application mailed by Social Security Administration earlier this summer. Although in its inception the plan faced skepticism from many seniors, now it seems to be growing in acceptance as Bush continues promoting the new drug plan throughout the country.

The theory behind the Medicare bill signed in 2003 was that allowing private sector to compete with Medicare will drive down the costs of prescription drugs. However, opposition to the new plan fears that cost containment will not prevent what can potentially lead to the rise of prescription drug costs and destabilization of the traditional Medicare.

Note: The author of this article is no longer affiliated with theSOP