The health care system in the U.S. and in the world is complex. As a health care
administrative professional, you need to understand the full gamut of factors that impact
this industry. Prior to beginning your assignment, go to the YouTube Website to view the
video titled “Pharmaceutical Industry in Transition: Dramatic Changes Ahead, How Will
You Adapt?
- From the video, assess how regulations in the U.S. impact the claims and facts presented
in this video. Hypothesize where you think the biggest opportunity will be for
pharmaceutical companies. - Compare drug pricing practice in the U.S. to those of another country of your choice.
Discuss your thoughts on these differences and similarities and the implications. - Research the career trends in health care related industries and make a prediction
regarding which career will prove to be the most economically rewarding. Provide
discussion regarding your position. - Experts suggest that pressures placed upon medical professionals, specifically, doctors,
are resulting in a decline in interest in this profession. Discuss your position on this
argument and propose a remedy to this problem that is logical and reasonable. - Provide a discussion regarding the role of health policies. Speculate how such policies
will impact organizations over the next decade. - Reflect upon the work that you completed in this assignment and summarize what
significant developments occurred for you.
The State of Healthcare
Introduction
Whenever the level of prosperity of a state is being discussed or analyzed, healthcare matters
take center-stage in the discussions at hand. This is because development is closely tied to the
economy which is dependent of the existent labor force. The supply and quality of labor is then
subject to the state of healthcare in any given country. Higher quality healthcare often translates
to a better economy and thus a more prosperous society. This is because of reduced infant
mortality and the preservation of the productive segment of the population which ensures that
there is a sizeable number of able-bodied people to supply the industries with labor. Increasing
development over the last few decades is indicative of the fact that healthcare has constantly
been improving.
Challenges occasioned by the Regulations on the healthcare system
The United States of America is one of the most developed nations on earth and one of the
factors that are believed to have contributed to this is the exemplary state of the country’s
healthcare system. Over the past few years however, experts in the sector have noted with
increasing alarm the decline in some crucial components of the country’s healthcare system.
These components are the pharmaceutical sector and also the labor force. The pharmaceutical
sector which was once vibrant is not a pale shadow of itself due to a reduced rate of patents
being issued in the field of medical compounds. This basically means that research and
development in the sector has gone down tremendously. At the same time, this problem could
have been compounded by the influx of generic medicinal drugs which have become more
popular than the originals, so much to the point that only a quarter of all drugs being purchased
in the United States (Reinhardt et al, 2004).
The second challenge that has been observed in the country’s healthcare system is an impending
labor shortage given a reduction in the number of young people taking up studies in the medical
field for their tertiary education. This means that at some point in the near future, there is going
to be a gap that will form given the fact that doctors going into retirement will not have sufficient
replacements.
The purpose of this paper is therefore to analyze these dynamics of healthcare with respect to the
current situation in the United States of America. The first aspect of healthcare to be analyzed in
this respect is the regulatory framework that exists in the country’s healthcare system and the
implications it has had on the operations of pharmaceutical companies.
Regulations in the United States are being pointed with an accusative finger for single-handedly
bringing down the pharmaceutical sector, especially the larger organizations that were
established decades ago. The patent laws for instance only grant the owner of a given intellectual
property a limited number of years before the patent expires making its application and use in
production processes free for all. The patents held by companies that produce and supply
branded drugs have provided them with additional revenue given the fact that they charge
premium prices for their drugs. The expiry of their patents opens the door for the supplier of
generics to produce cheaper versions of these drugs and sell them thus denying the big
pharmaceuticals revenue two-fold. Firstly through a reduced market share and secondly by
driving market prices down.
When it comes to the prescription of drugs, emphasis has changed from that of the physicians’
views taking precedence to a situation where it is the interests and rights of the other healthcare
stakeholders taking root. Affairs are basically conducted to suit the requirements of the law so
much that doctors are quickly becoming more and more obsolete in the decision making
network.
The biggest opportunity that exists in the pharmaceutical sector has been brought about by gaps
that larger organizations are unable to adequately fill. Big pharmaceutical operations are having a
difficult time adjusting to the changing dynamics in America’s healthcare system. This creates an
opportunity for smaller pharmaceutical enterprises to thrive through the application of
collaboration in the area of research and development. Their size will also allow them to be more
widespread and diverse unlike affiliates of large pharmaceutical operations that have been
working in a centralized structure. These alliances will also lead to acquisitions which will
streamline the product offering of the pharmaceutical sector and thus restore it to its former
glory.
Pricing Structure of Drugs in the United States compared to that of India
In the United States of America, prescription drug prices are subject to several issues such as
rebates and discounting which is bound to take place in the course of the drugs moving through
the supply chain. This is not to say that these stages affect the physical movement of the drugs.
The payment system is where these are most clearly manifested. Prices paid by consumers of
these drugs depend upon their purchasing power as well as the degree to which competition is
taking place in the market.
Purchasers with greater purchasing power will end up paying lower prices than those who do not
have bargaining power. When it comes to competition, the issue of branding and generics comes
into play. Branded drugs protected by patent cost higher and as a result are offered stiff
competition by their generic counterparts. At times two or more patent-protected drugs will also
face competition from other branded drugs. This type of competition is seen when the two drugs’
therapeutic effects happen to be similar. This then forces them to engage in somewhat of a price
war thus reducing their prices. The effect of this on the prices of drugs paid by consumers is
tremendous as it becomes affordable to a wider population.
In India on the other hand, the government has maintained a firm grip on the pricing mechanisms
being used to decide the final prices that are to be paid by the consumers are relatively
affordable. For this to be achieved, the government health body has listed a total of 652 drugs
which will be subjected to price controls (Mazumdar and Banerjee, 2013). The effect of this will
be a newfound ability by the country’s National Pharmaceutical Body to control the prices being
charged for 348 drugs that are listed as essential medicines. Drugs subjected to these controls are
those that control more than 1% of the market share in their respective segments. The long term
aim of this policy is to reduce the range of prices that are charged for the same molecule
available in the market.
Potentially Rewarding Career path in the USA’s healthcare system
Within the United States’ healthcare system, the career path that has the most potential with
regard to rewards in the future is that of care for the elderly population. This is because
improvements in the healthcare sector have brought with them issues such as increased life
expectancy and this is leading to the growth of the elderly population. This segment in the
healthcare system has unique healthcare complications related to old age and given that there is
not yet any mainstream career path aimed at filling the gap. This unchartered territory is ideal for
one who seeks to reap the most from the healthcare system’s opportunities. The ageing
population is susceptible to several ailments such as Alzheimer’s, cardiovascular complications
and prostate cancer among other illnesses (Wroe et al, 2012). The present healthcare system
scarcely has the resources to adequately deal with them and this leads to the execution of many
reactive measures yet there is an opportunity for proactive measures to be taken to help this
population to enjoy a fruitful retirement. This creates opportunities in areas such as Research &
Development, Pharmaceuticals and primary care. This will not only reduce pressure on the
existing facilities but also widen career prospects for those who are pursuing healthcare related
courses.
The Declining Interest in Healthcare
It has been noted by professionals in the healthcare sector that there I a reduction in the number
of young people who are showing an interest in pursuing healthcare related courses and more
specifically those that will subject them to dealing directly with patients. These are mainly the
jobs of physicians and nurses. The main source of information for most people is that which is
contained in mainstream or popular media. This includes online, print and broadcast media and
in recent days the general population has been presented as helpless victims who are subject to
each and every whim of the healthcare sector.
The public face of the healthcare sector is a doctor and this has led many to associate the ills of
this sector to doctors. The recent healthcare crisis that has highlighted the plight of the uninsured
and this has acted to vilify the medical profession. Another reason why the interest of the masses
in healthcare jobs has waned is the widening of the economy and this has provided opportunities
in other healthcare sectors. At times there is a misconception or notion about the difficulty
involved in studying medicine. This has served to channel individuals away from profession. The
increase in responsibility for nurses due to their empowerment in healthcare decision making is
also contributing to the waning number of people training as doctors. This situation can however
be easily mitigated through increasing opportunities for those who are drawn from minority
groups that seldom get chances to pursue medical courses. When this happens, it is highly likely
that there will be a newfound zeal for doctoral courses. Efforts also need to be made through
popular media to once again popularize the profession of doctors through the highlighting of the
different career options doctors can take up in the medical profession. Incentives should also be
offered for students to take up medical school. These may be in the form of work-study programs
or scholarships for those interested in studying this. The sponsorship of such programs can be
achieved through public-private sponsorships. This way, the key stakeholders in the sector get to
work together with the aim of alleviating the problem. This needs to be included in career
guidance initiatives given to students who are applying to go to university and college after high
school.
The Role of Health Policies
Healthcare policies are put in place to govern the operations of the healthcare sector. This
includes the definition of the roles of the different stakeholders as well as their obligations and
entitlements. This is aimed at ensuring the maintenance of a high standard of healthcare as well
as sound cooperation and coordination of all activities geared at ensuring the health of the
population of any given state. These policies also aim to ensure the even distribution of
healthcare services across the population with special concern for areas where there is acute
need.
Looking forward, these policies are bound to oblige organizations to work more closely together
rather than compete and compromise the provision of healthcare. These policies are also bound
to spell out different ways healthcare organizations can receive public funding to ensure they
adequately meet their objectives. Another thing policies are bound to bring to organizations in
the future is rules and regulations that will align their operations towards healthcare objectives
rather than commercial ones.
Significant Developments that have occurred for me
From the first part of the exercise, the impact of the regulatory environment on the state and
prospects of the healthcare system became clearer. The pharmaceutical industry which supplies
medicines and other compounds used in the treatment of diseases has suffered as a result of
present regulations governing its operations in the United States. In a bid to ensure due diligence
is prioritized, the operations of pharmaceuticals have in a way become constricted. This situation
however opens up the playing field for smaller players.
Policies should therefore be formulated in such a manner that caters for the needs of all
stakeholders rather than favoring some at the expense of others. The Indian model for instance is
completely on the side of consumers and this places undue pressure on producers.
It is also important for authorities to put in place proactive measures that will ensure a sustained
influx of people getting into the medical profession so as to avoid staff shortages in such a
sensitive industry.
References
Reinhardt, U. E., Hussey, P. S., & Anderson, G. F. (2004). US health care spending in an
international context. Health Affairs, 23(3), 10-25.
Mazumdar, M., & Banerjee, D. S. (2012). On price discrimination, parallel trade and the
availability of patented drugs in developing countries. International Review of Law and
Economics, 32(1), 188-195.
Wroe, P. C., Finkelstein, J. A., Ray, G. T., Linder, J. A., Johnson, K. M., Rifas-Shiman, S., … &
Huang, S. S. (2012). Aging population and future burden of pneumococcal pneumonia in the
United States. Journal of Infectious Diseases, 205(10), 1589-1592.