Danika Parsons

EXTROVERTED CAPITALISM: DRUG PRICE REGULATIONS AND KARL MARX

One of the biggest topics in the media around the world is something that affects everyone across age, class and racial divides - health care. Many studies have been done on the cost of prescription drugs and the price differences between several different nations. The relative significance of this issue in the public domain has varied. This issue surfaced in the United States during the debates over the creation of Medicare. In those debates, many people wanted to add prescription drugs to the program. The program only covers drugs administered in hospitals, and is most often used for elderly American citizens. This debate is often between those forces advocating a complete laissez-faire approach to drug pricing, pitted against individuals who desire strict federal price controls. Even though there is no consensus on how to measure the prices of drugs, there has been a few studies done by a variety of different companies and government organizations. And the results differ from study to study for example, the 1992 GAO report also showed that during the 1980s, average drug price increases were triple the inflation rate. Another study found that median price increases between 1985 and 1991 of a basket of 29 drugs increased 124.8% while the CPI increased only 26.2%. These studies just encouraged the citizens of the United States to push harder for prescription drugs to be put into the medicare program. There are a lot of factors in these studies, such as inflation rates, drug usage, what year(s) its held, and how often the drug is purchased. The general inflation rate from 1980 to 1990 was 58%; the rate for drugs was 152%, and a study determined that the fifty drugs most frequently used by seniors increased at more than twice the rate of inflation. For instance the drug Lorazepam, used in the treatment of Parkinson’s Disease and some convulsive illnesses, the price of the drug increased 179 times the inflation rate during the period of the study. A handful of studies compared the prices between a few different nations. A GAO study indicated that Americans pay 32% more for a basket of 121 drugs than Canadians do, and when it comes to the price of antidepressants Americans pay between 1.7 , and 2.9 times more for these drugs than Europeans. Americans pay much more than citizens of other nations, and prices rise substantially faster than inflation. Americans use fewer drugs in response to the higher list prices, the cheaper European prices mean that those citizens are using more drugs, often unnecessarily, simply because they are cheaper. The one thing these studies do not take into account is improvements in drug quality. Using all of the evidence above I believe that drug price regulation in the United States is necessary.