All drugs have side effects-not only on the patient, but also on
thefinances of the insurance system and the delivery of health care
services.
Pharmaceutical costs have skyrocketed to the point that we now spend
8 trillion a year on drugs. providing the opportunity for windfall
profits for
health care institutions and drug companies. Under the current system
of standard pricing, prices are officially established for 12,000
types of
medical products, -including drugs, However, hospitals and medical
clinics are able to negotiate discounts because they make bulk
purchases
and claim that they need to offset storage costs, But hospitals and
clinics that buy drugs at a discount are permitted to bill the
insurance system
for official price. Hence the windfall profits. The more drugs that
health care institution prescribe, the higher their profits. The
Ministry of
Health and Welfare has responded to this situation by drafting a bill
to revise the system for setting prices.
After the proposed changes are implemented, Pharmaceutical
companies would announce their asking prices, and official prices
would
be determined by adding distribution charges and fees to cover
losses. The Ministry would study the efficacy of various drugs in
order to
classify them into groups. Drugs placed into identical groups would
be sold for uniform prices. These prices would, constitute the upper
limits
that insurance plans would pay for drugs. If the price of a drug
were to exceed the official price, the difference would come out of
the patient's
pocket. Health care institution would be forced to explain to their
patients why they are using expensive medicines that are not fully
covered by the insurance system.
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