Pharmaceutical Insurance Introduction
One of the most important parts of health service are medicinal products which have definite price taking a weighty part in therapy cost. Over the last years, medications become progressively complicated and expensive. Life-term medications appear in more quantity on the market which requires considerable expenses. An entire series of medicines delays age-related loss of earning capacity and provides a society with high economic effect. Thus, in accordance with development of medical science, meaning of medical support constantly grows. Large hospitals hire their own pharmacists staff. In the United States, automated systems of medicinal treatment are widely spread. They are introduced directly in medical establishments. Unified data banks about features of medicinal products are created.
This sphere of medical assistance is also influenced by insurance principles. Insurance of health service may be obligatory and supplementary. In many countries, there is no medical assistance. It is explained by the fact that there is no strict differentiation between everyday medications which may be obtained at any store and pharmacopoeial drugs that may be found only at licensed pharmacies. The majority of medicinal forms are handed on doctor’s prescription on a special form. According to the World Health Organization, medical problems may be solved by means of 210 chemical substances, since most people cannot afford other remedies.
Pharmacists are also united in associations and protect their interests during negotiations. Forms of medical assistance may be different. One of the most prospective and effective is a system of family pharmacist where each pharmacist has an insured persons list who order all prescribed medications. Developed countries generally provide free or subsidized medicinal products prescribed by a doctor.
Ways to Reduce Prices on Medications
The cost of dispensed drug includes price of pharmaceutical company and extra charge for pharmacist (expenses + income). This income is agreed during negotiations between insurance organizations and associations. Price on medications offered by pharmaceutical company almost cannot be changed. The matter of price regulation on medicinal products can be solved in separate cases. This is possible only when it comes to extra charge for pharmacist. Its amount is determined during negotiations associations of insurance companies and pharmacists. The level of price regulation on medications is not similar in different countries.
There are the following forms of price regulation on drugs:
- Government price control
In a number of countries, there is a strict control over sales prices on medications in the interests of public health insurance. The price on drugs is controlled by a special governmental agency in the system of ministry of economics. This regulated system implies that contributory sickness funds do not pay extra bills for medications (i.e. surpassing officially agreed prices). In the U.S. and FRG, there is practically no price control.
- Government drugs procurement
Prices for medications may be regulated by means of government procurement for public usage. While making large purchases, government may put tough pressure on manufacturers on the stage of price formation.
- System of recommended prices
Insurance companies (for instance in FRG) choose the cheapest medication and determine its price as the recommended one. This very price will be paid by insurance company to pharmacist. If a patient buys more expensive medication of this group, he will pay the difference between its real and recommended price. In order to attract customers, commercial insurance companies offer extra payment surpassing recommended prices.
- Establishment of agent firms
Establishment of agency companies conclude agreements with pharmacists and sell package of these agreements to maximally big number of insurance companies. Purchase of such packets puts the onus on insurance companies to pay for pharmacists on the basis: wholesales price + fixed surcharge. Thus, the degree of driving up the price is regulated in mediatory structures. Agent firms, in turn give credit cards to insurance companies which they distribute among their customers.
Insured customer goes to the drug store with prescription and this card. The card encodes the billing address for medications purchased by a customer. The invoice is settled by intermediator firm via system of telecommunication connection. For instance, in the U.S. the company, Pharmaceutical Card System (view information) has concluded agreements with more than 90 per cent of American pharmacies. Thus, there is a formation of cooperation system between pharmacists and insurance companies. Due to such system, pharmacists are able to use discount to distract insured people from purchase of the most expensive drugs. This policy is eligible for anti-monopoly legislation.
Measures Aimed at Drugs Consumption Regulation
- Participation interest
This measure is realized in the form of payment of definite amount for each issued invoice (the UK and the NL), for each purchased medication regardless of its price (FRG), in the form of co-participation in insurance – extra payments of fixed percentage for drugs to overall insurance cost (Belgium, Denmark, Italy). A number of countries pay for issuing of prescription separately (FRG). All procedures are enumerated in a quarter bill which is issued for a patient. If the latter needs another prescription, it is taken into account. In such companies, as “Blue Cross” and “Blue Shield” (in the U.S.), the amount of extra payments is indicated in policy and influences its cost. The higher part of client’s payments, the lower cost for his policy.
- Limited lists
Many countries have limited lists of traditionally expensive and having analogues medications which are not paid by insurance companies in case of their prescription. Medications applied for self-medication are included here as well. Limitation lists usually belong to ambulatory care. Very often, several lists of medicines paid in different way are created.
- Medications consumption pattern
Insurance companies try to influence the pattern of drugs consumption affecting doctors and patients via the so-called fashion on some branded medications (overly advertised best-sellers of pharmaceutical market).
All in all, along with the development of medical science, pharmaceutical insurance gets more and more complicated. Different countries have various approaches to their solution which take into account an average consumer who wants to have as many free services as possible.
Viagra and Pharmaceutical Insurance
Pharmaceutical network dealing with pharmaceutical insurance in the U.S., CVS Health Corp, excluded Viagra from the list of medicines the cost of which would be remunerated for citizens nest year. The company hasn’t explained the cause for such decision. Moreover, customers of this pharmacy network will be able to purchase this ED drug either by paying its full cost or within insurance in case insurance plan includes this medication. Nevertheless, company didn’t refuse of insurance wrap of the main competitor of Viagra – Cialis. But another huge American insurance company included both remedies for insurance remuneration.
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