Browsing by Subject "pricing comparison"

Theoretical framework: The consolidated pharmaceutical market is becoming increasingly global and the same international pharmaceutical companies operate around the world in different countries, responsible for drug development and production. The high costs of developing novel medicines and the motive for higher profits has led to elevating price level of pharmaceuticals and health care services. Finland and the U.S. offer two extremes at the pharmaceutical market. The pharmaceutical market field in Finland is very structural and rigid, and medicine prices are regulated by law. In the U.S. the prices are based on the laws of supply and demand and the prices differ by different states, retailers and insurance policies. A small-scale longitudal price comparison is also reviewed to showcase the effect of continuously rising medicine prices. Study objective: The idea of this study is to describe and compare pricing mechanisms of pharmaceuticals and price differences between two very different market structures and review how these might affect the cost-effectiveness of national health care spending. These divergences are also mirrored to survey recent global pharmaceutical market problems such as drug shortages, possibly due to less appealing markets of higher price regulation policies. Materials and methods: Price data were collected from national, official, open-source databases. National health care expenditure and comparison to GDP was collected from publications by the OECD. All monetary values have been presented in both currencies (EUR and USD) to present more comparable values. Results: When compared to other OECD-countries the U.S. spent distinctly the largest amount of funds on health care per capita. Finland’s national health care costs were thousand times minor in total spending and less than a half per capita when compared to those of the U.S. With lower expenditure Finland manages to offer access to public, government-funded health insurance program. Meanwhile the prices of prescription medicines in Finland have decreased significantly, the prices for have continuously elevated in the U.S. Conclusions: The outcome of this study is that free markets and a complex supply chain, compared to more regulated markets with more transparency, have higher overall price level in pharmaceuticals and health care services. Free markets and sufficient intellectual property rights are more enticing to pharmaceutical companies. They promote new innovations and developing of much-needed novel therapies to modern health problems, such as AIDS and the global threat of worsening situation of antibiotic resistance. More regulated markets may create problems such as drug shortages and are often considered complex and less appealing market systems due to high level of administrative work but conserve the cost-effectiveness of the use of public funds.