The World's Health Care Crisis

From the Laboratory Bench to the Patient's Bedside

Ibis Sanchez Serrano

• Publisher: Elsevier
• Year: 2011
• ISBN:
  9780123918765
• Topic: Medicine
• Subtopic: Pharmacology

At present, human society is facing a health care crisis that is affecting patients worldwide. In the United States, it is generally believed that the major problem is lack of affordable access to health care (i.e. health insurance). This book takes an unprecedented approach to address this issue by proposing that the major problem is not lack of affordable access to health care per se, but lack of access to better, safer, and more affordable medicines. The latter problem is present not only in the United States and the developing world but also in countries with socialized health care systems, such as Europe and the rest of the industrialized world. This book provides a comparative analysis of the health care systems throughout the world and also examines the biotechnology and pharmaceutical industries.

• Examines the health care structure of the United States, Europe, and the third world, both separately and comparatively
• Offers primary source insight through in-depth interviews with pharmaceutical and health care industry leaders from around the world
• Carefully explains, in clear terms, the intricacies of the health care and pharmaceutical system and how these intricacies have led to the current crisis
• Offers concrete, comprehensive solutions to the health care crisis

1. The World’s Health Care Crisis

The United States’ Leadership

Being able to afford health care is a problem not only in developing countries and the United States, but also globally. The health care crisis that the world is facing has two interrelated sides: access to health care attention and access to pharmaceuticals. This chapter discusses the health care reforms recently proposed in the United States and the contribution that the US pharmaceutical industry has made to the crisis.

Keywords: Global health care crisis, Obama health care plan, Medicare, Medicaid, pharmaceutical industry, United States, insurance companies, biotechnology industry, health insurance in the United States, health care reform

If this is the best of all possible worlds, what must the other worlds be like?

—Voltaire, Candide, ou l’Optimisme (1759)

Finding effective ways to provide and pay for health care (in particular, for medicines) is no longer a problem exclusive to the less-developed countries—such as African nations, large parts of Asia, and some parts of Latin America—but is also a great challenge even in the world’s richest countries: the United States, European nations, Canada, Japan, and Australia. Although the economic, political, and cultural differences that exist between poor, middle-income, and wealthy nations are enormous, all nations have to deal with serious health care issues of one sort or another, regardless of whether their health care systems are universal. In fact, the world is going through a health care crisis—that is, a financial crisis in which countries cannot successfully meet the twenty-first century person’s access to medicine due to the rising cost of health care services and, more importantly, of pharmaceuticals. This was not the case a few decades ago, especially in the wealthier nations. Not surprisingly, people all over the world have expressed great dissatisfaction and concern about this situation, which is generally perceived as unsustainable in the near future. This health care crisis is worsened by rising age-dependency ratios and aging populations in these countries; and it then competes with the pension crisis for the money and political will that are needed to solve these problems. It is ironic that one of the most remarkable conquests of the past century was to provide humans with the opportunity of living longer when this great privilege has not necessarily resulted in living a healthier, more fulfilling, and happier existence.

Though a health care crisis is more evident in the developing world and the United States—the country with the worst health care system in the industrialized world, ¹ as embarrassedly evidenced during the 2008 US presidential campaign and also by statistical measures (see the later discussion)—it is also affecting Europe, which, in opposition to the United States, has a long tradition of institutionalized social welfare. In many European countries, national health systems were developed to create social safety nets for all citizens. In fact, health care costs in Europe have continued to rise in recent years, and to keep costs low, in addition to pharmaceutical price controls, a variety of payment and reimbursement systems (i.e., copayments, reference pricing, ² differential pricing, ³ and others) have been created. ⁴ Although health care systems and procedures to set prices and reimbursement levels vary from country to country on the European continent, the ways in which most European countries generally achieved price controls have been by setting prices at a level that may not reward financially pharmaceutical innovation to the same degree as in the United States, and by delaying decisions about reimbursement. In part, this fact explains why the largest European pharmaceutical companies have developed strong research and operational bases in the United States—the world’s largest pharmaceutical market. Other countries that have very socially conscious health care systems, such as Canada, Japan, and Australia, are struggling to find ways to deal with rising health care and medicine costs.

^1.This has been publicly acknowledged by the US Secretary of Health and Human Services, Kathleen Sebelius, in an interview by The Wall Street Journal published at the end of 2009. Sebelius, K., 2009. Laying the groundwork. The Wall Street Journal, November 23. http://online.wsj.com/article/SB10001424052748704204304574544063891042666.html.

^2.Reference pricing is defined as any reimbursement rule used by a third-party payer or regulator that sets the maximum reimbursement for one product by referring to the price of some other comparable product in the same market. Danzon, P.M., 2001. Reference pricing: theory of evidence. Wharton School, University of Pennsylvania, May 22, 2001. http://hc.wharton.upenn.edu/danzon/PDF%20Files/barcelonaEditfinal%20.pdf.

^3.With differential pricing, identical products are priced differently for different types of customers, markets, or buying situations. See Danzon, P.M., Towse, A., 2003. Differential pricing for pharmaceuticals: reconciling access, R&D and patents. International Journal of Health Care Finance and Economics 3, 183–205.

^4.Kaplan, W., Laing, R., 2004. Priority Medicines for Europe and the World. World Health Organization, Geneva, p. v.

Facing severe criticism in the United States, where there are no “official” drug price controls (unlike in Europe and other regions), the pharmaceutical industry, which, between 1995 and 2002, was the most profitable industry in the United States (and still remains among the top three most profitable businesses in the country, with profits as percentage of revenues of 19.3% and with returns on shareholders’ equity of 23%⁵), has had to defend itself against “abuse” charges for the way in which it prices medicine. They claim that in the United States (a country where doctors’ and health care services’ fees are the most expensive and profitable in...

Table of contents

• Cover image
• Table of Contents
• Front-matter
• Copyright
• Dedication
• How to Use
• Preface
• Acknowledgments
• Introduction
• 1. The World’s Health Care Crisis
• 2. The Health Care Crisis in Other Parts of the World
• 3. A Brief Commercial History of the Biopharmaceutical Industry up to the Year 2000*
• 4. The Biopharmaceutical Industry in the Twenty-first Century
• 5. Understanding Research and Development and Marketing in a Biopharmaceutical Company
• 6. The Pharmaceutical Regulators
• 7. The Academia–Industry Relationship
• 8. Translating Academic Innovation into Health Care Products
• 9. The Biotechnology World and Its Challenges
• 10. Causes of the Pharmaceutical Crisis
• 11. Wealth versus Poverty
• 12. Social Responsibility, Governmental Role, and Nongovernmental Organizations
• 13. Time for Reorganization
• Conclusion: Future Trends
• List of Terms
• Bibliography