Running head: U.S.

DRUG PRICES VS THE WORLD 1

U.S. Drug Prices Vs. The World

U.S DRUG PRICES VS THE WORLD 2

Americans usually pay approximately four times more the price of drugs compared to

other international countries. Countries with the same Par Capita Income as the U.S. typically

have lower drug prices. Other countries like France and Germany exceed the U.S. in the Per

Capita spending of drugs (Hwang & Kesselheim, 2016). This cost is due to the competition,

which is limited among the companies for drugs. Nevertheless, since then, growth in spending

has completely exceeded that of other developed nations. Americans use fewer drug

prescriptions compared to other European countries, and when they use them, they are more

likely to buy those of not very expensive broader versions.

However, the complexity of the U.S. system of healthcare and the liquidity of the supply

chain system of drugs bring in conditions that cause the maximization of prices and limited

competition. All wholesale manufacturers and distributors in the U.S. have developed

mechanisms that help them maximize profits. Almost all other countries, except the U.S., have

policies that tend to lower the drug prices (Kanavos et al., 2013). These policies include control

of prices or regulations that limit the cost-effectiveness thresholds, reference pricing, and drugs’

profitability. This does not provide an answer as to why drug prices tend to be high in the U.S.

but rather how some countries lower their drug prices. Other countries are not willing and do not

feel the need to pay high prices compared to the U.S., who are always ready to pay for high

prices.

Nonetheless, there is always a need for the U.S. to lower their drug prices while still

encouraging manufacturers to make more innovations. Lowering these prices will lead to

significant savings in the country. Each drug is grouped according to classes in which they have

the same effect. For example, all types of ibuprofen belong to the same class since they work

actively the same (Hwang & Kesselheim, 2016). This class would include other drugs like
U.S DRUG PRICES VS THE WORLD 3

naproxen and aspirin since they have the same agents. For any drug at a given price, the insurer

pays a set amount, that is, a reference drug price for a specific medicine in a given class level. A

company for drugs can choose to set a higher price for a drug, and in case a consumer agrees to

pay for it, he/she pays the difference amount.

Additionally, by setting the price of reference to be a little bit low, the manufacturers of

the drugs can reduce the prices of drugs that are good substitutes. If the manufacturers do not do

this, then the consumers will opt for products that cost lower. By doing this, reference pricing

does not pull down innovation (Zwier, 2015). Instead, it encourages a different way of doing it.

This promotes cost-effectiveness since consumers avoid high out-of-pocket costs, and the market

also rewards innovations that lead to drugs that are low priced. Also, this will help Americans to

reduce their spending on health. The nursing leader can act as a change agent in this issue. This

is by providing forums that support and influence others towards the implementation of

successful programs in organizations of health (Kanavos et al., 2013). In this case, for instance,

he or she can inspire others to adopt this change in lowering the prices of drugs in the country.

This can be defined as effective leadership by the nursing leaders.

In conclusion, the prices of drugs in the United States are very high in comparison to

other countries. This is because the companies that manufacture drugs have limited competition

and therefore charge very high prices. The U.S. government needs to consider a change in these

prices in the economy and view it as a positive change. The nursing leaders can also play a role

in this, as discussed above.

U.S DRUG PRICES VS THE WORLD 4

References

Hwang, T. J., & Kesselheim, A. S. (2016). Public referendum on drug prices in the US: will it

bring relief?. Bmj, 355, i5657.

Kanavos, P., Ferrario, A., Vandoros, S., & Anderson, G. F. (2013). Higher US branded drug

prices and spending compared to other countries may stem partly from quick uptake of

new drugs. Health affairs, 32(4), 753-761.

Zwier, P. J. (2015). High Prices in the US for Life-Saving Drugs: Collective Bargaining through

Tort Law. Marq. Benefits & Soc. Welfare L. Rev., 17, 203.