Generic Prescription Drug Costs Prescription drugs have been causing problems in the United States for a very long time. Pharmaceutical companies are one of the largest profiting global industries. It was in 2009 when drug shortages increased with numbers reaching what many have termed crisis level which raised all prices of generic prescription drugs significantly (Fox, Sweet, & Jensen, 2014). This increase was and still is leaving patients with a life threatening decision; either go on paying for their prescriptions which they cannot afford or stop their treatment all together and risk their illness progressing and leading to possible death. Some have chosen to end their treatment altogether, while other patients have confessed to taking dangerous measures to ensure their refills last longer like cutting their pills in half or skipping doses. The United States drug manufacturers are raising prices endlessly without regulation. Instead of generic brand medication being affordable, they are creating their own monopolies and setting their prices just as competitively as name brands. Instead of buying and stocking manufacturers with raw materials from within the United States, they source raw materials from overseas creating delays and a huge shortage in raw materials has surfaced. Instead of keeping the FDA in the loop as to what is going on in the production process, manufacturers wait until the very last minute to report a problem which goes against all rules, regulations, and even the law. Generic prescription drug costs have risen dramatically in the past decade due to industry monopolies, raw material shortages, and poor communication between manufacturers and the Food and Drug Administration. The first of many reasons for the increase in price of generic prescription drugs is due to a surge in industry monopolies. When name brand manufacturers wish to create a new patent and invest in the research and production of a new drug, it can cost anywhere from 230 to 500 million dollars (Openshaw, 2005). They then must set the price on the new drug high to compensate for all of the money spent in the process of development. Once they have earned the money for development back and the drug patent expires, any generic brand manufacturer can take over production of that drug. As the name brand manufacturers move on to pursue more profitable drugs, they leave generic manufacturers with total control in the price of that prescription in the market. Mergers of small generic drug manufacturers who once sold the same drug can now control the price of that drug after eliminating competition, raising the prices at their own will (Schweitzer, 2013). This allows and even encourages them to set the prices just like brand-name manufacturers would because there is no longer any company selling at a higher price above them. Furthermore, these mergers go against all protocols for monopolizing in the pharmaceutical world. Why is this almost a betrayal to the people who need these medications? Let’s backtrack to the very beginning of generic prescription drugs. They came about for reasons such as, providing high-quality health care at lower prices, saving the American health system a ton of money, and preventing brand monopolies. Generic prescription drugs were a way for America to create a free-market solution for all of the problems with pharmaceutical access which worked for three decades up until now in which the United States is experiencing market failure (Greene, 2014, para 8). The second of the many reasons for the increase in price of generic prescription drugs is due to a shortage in raw materials. To start off with a powerful statistic: nearly 80% of all raw materials in the United States come from abroad (Wilson, 2012, para. 22). Though manufacturers have suggested that the Food and Drug Administration should hire more people to work in the drug shortages department, it is still virtually impossible for them to inspect manufacturers in different countries. The fact that so many active pharmaceutical ingredients come from overseas, when they have raw material shortages or manufacturing difficulties, it is inevitable that the United States will be affected on a very large scale. Outsourcing raw materials that are more difficult to get approved by the FDA causes stoppages in production and shortages in the drug itself. (Schweitzer, 2013). Why don’t name brand manufacturers experience the same shortages as generic brands? Name brands have plenty of backup manufacturing lines to produce a multitude of the same drug in the same time. Generic brands are often made on one production line that is also used to make multiple other drugs for that manufacturer. As raw materials make it into the United States among FDA approval, they are dispersed first to name brand manufacturers because they are considered a priority compared to generic brands. Since raw material shortages happen so often, manufacturers increase the price of generic prescription drugs because they have to make up for their lack in selling higher quantities. The third and final reason for the increase of generic prescription drug prices is because of poor communication between manufacturers and the Food and Drug Administration (FDA). Manufacturing companies are required to warn authorities six months in advance when they foresee a drug shortage, however they fail to do this and they don’t face any consequences that are suggested. Besides communication issues, the FDA does not set and enforce the same laws on generic brand manufacturers as they do on name brands, even with all of the price increases that have been occurring lately. The Federal Law system requires brand name manufacturers to pay a rebate to Medicaid when they increase the price of drugs faster than the inflation rate however, generic brands do not have the same requirements (Cummings, 2015, para. 19). The increase in prices of generic prescription drugs even sparked the interest of the Subcommittee on Primary Health and Aging. They held a meeting to discuss why the prices of prescription drugs soared to unaffordable prices and not a single representative from generic manufacturers showed up to give testimony. The FDA has apparently sent nearly 7000 warning letters in 2013 to the top generic brand manufacturers to either lower the price and stop breaking the law or face the consequences. Since then there has been another 40% increase in price which can be blamed on heightened FDA scrutiny (“Hearing Highlights,” 2014, para. 7). Another huge reason why the Food and Drug Administration is to blame for the heightening prices of generic prescription drugs is because they are refusing to change their standards. In fact, health groups encouraged them to cut down even more on factory inspections after recent deaths due to supposed contamination (Wilson, 2012). Qualifications for ‘lifesaving’ medications are also so high that so few drugs fit the criteria allowing manufacturers to keep to themselves when there are shortages of less important drugs. The FDA is often kept in the dark when it comes to production shortages and by the time they are informed, it is almost too late for them to step in and help in a timely manner and that is why poor communication causes price increases in the pharmaceutical world. Generic prescription drug costs have risen so high that they are now affecting the lives of patients who need these drugs for their health and well-being. Generic manufacturers were originally brought about as a way for America to create a free-market solution for all of the problems with pharmaceutical access. This market failure is not only affecting patients but it has also been the cause of hundreds of small business pharmacies across the nation to shut down. They are actually losing money with every prescription filled because they are paying more than insurance companies are reimbursing. From 2010 to 2014, there has been a 373% increase in the cost of generic prescription drugs. In 2010, patients were paying an average of $13.14 per prescription and in 2014, more than a third of all generic drugs cost more than $100 per (Hirst, 2014, para. 19). Generic prescription drug costs have risen dramatically in the past decade due to industry monopolies, raw material shortages, and poor communication between manufacturers and the Food and Drug Administration.

References
Cummings, E. (2015, December 20). Restraining the cost of prescription drugs. Afro - American Red Star, A.7. Retrieved from http://ezproxy.philau.edu:2048/login?url=http://search.proquest.com/docview/1646331897?accountid=28402
Manufacturing companies respond to reductions in supply of drugs by raising their prices simply because they can. The article also states the few other reasons for drug price increases: drug ingredient shortages, industry ‘consolidation’, and production slowdowns due to manufacturing problems. Federal law requires brand name manufacturers to pay a rebate to Medicaid when they increase the price of drugs faster than the inflation rate however, generic brands do not have the same requirements. This allows them to raise the price as high as they want without regulation or consequences. This article was written in 2014 by Elijah Cummings who is a ranking member of the Committee on Oversight and Government Reform. The information from this article can be used in a few different places in the research paper however, though the information is true it is also biased since Cummings states that he personally suffers from the increasing prices of prescription drugs. He talks more about how the general public is affected by the issue and less about why the issue is occurring.
Fox, E. R., PharmD., Sweet, B. V., PharmD., & Jensen, V., R.Ph. (2014). Drug shortages: A complex health care crisis. Mayo Clinic Proceedings, 89(3), 361-73. Retrieved from http://ezproxy.philau.edu:2048/login?url=http://search.proquest.com/docview/1507834302?accountid=28402
According to this article drug shortages are 43% because of manufacturing problems, 15% because of delays in manufacturing or shipping, and 10% because of shortages in raw materials. Generic brands are more likely to experience shortages than name brands because they don’t have any backup manufacturing lines. Generic brand drugs are often made of one production line that is used to make many other drugs and that is also a cause for shortages. Raw materials are sent to name brand manufacturers first because they are a priority and generic brands come second. This article is perfect for the raw material shortages section of the research paper. The author Erin Fox is Manager of the Drug Information Service at University of Utah Health Care and Associate Professor at the Department of Pharmacotherapy, University of Utah College of Pharmacy and her knowledge will be a great addition to the paper.
Greene, J. (2014, November 20). Generic drugs kept health care cheaper for 30 years. Why are their prices surging? Retrieved January 23, 2015, from http://www.slate.com/articles/business/moneybox/2014/11/generic_drug_prices_why_the ir_prices.
This site has a lot of information on the very beginnings of generic prescription drugs. They came about for reasons such as, providing high-quality health care at lower prices, saving the American health system a ton of money, and preventing brand monopolies. Often times, there will be many different companies competing to sell the same drugs. As the larger brand-name manufacturers drop these prescription drugs to pursue more profitable ones, they are allowing the generic suppliers to now control the market over that specific drug. This allows and even encourages them to raise the prices just like brand-name manufacturers would. Generic prescription drugs were a way for America to create a free-market solution for all of the problems with pharmaceutical access which worked for three decades up until now in which we are experiencing market failure. This is an article written by Jeremy Greene who is an Associate Professor of medicine and the history of medicine at the John Hopkins University with an MD and a PhD as well as an author of a book written specifically about generic prescription drugs.
Hearing highlights the problem of skyrocketing generic drug prices - RxRights. (2014, November 25). Retrieved January 24, 2015, from http://www.rxrights.org/congressional- hearing-skyrocketing-generic-drug-prices/
This article gives insight about what was happening behind the scenes with representatives of the Subcommittee on Primary Health and Aging after the prices of prescription drugs soared to unaffordable prices. The United States doesn’t have a national health care program that is allowed to negotiate prescription drug prices with pharmacies. This allows pharmaceutical companies to set their prices at whatever they want without any sort of regulation. They set up a hearing to discuss the issues of the recent increase in prescription drugs and not a single one of the generic drug manufacturers showed up to give testimony. The FDA has apparently sent nearly 7000 warning letters in 2013 to the top generic brand manufacturers to either lower the price and stop breaking the law or face the consequences. Since then there has been another 40% increase in price which can be blamed on heightened FDA scrutiny. RxRights is a very reputable source with a lot of information that is backed by many other accredited people.
Hirst, E. J. (2014, Nov 28). Generic drug prices skyrocket in last year: Shortages of raw materials and industry consolidation are among factors cited. Los Angeles Times, B.4. Retrieved from http://ezproxy.philau.edu:2048/login?url=http://search.proquest.com/docview/1628429330?accountid=28402
The article goes more in depth on why prescription drugs are experiencing an increase in cost that has nothing to do with controlling the market. Medical advancements used to replicate brand-name drugs have become more expensive along with raw material shortages used to produce them. From 2010 to 2014, there has been a 373% increase in the cost of generic prescription drugs. In 2010, patients were paying an average of $13.14 per prescription and in 2014, more than a third of all generic drugs cost more than $100 per. Even pharmacies are affected by the recent soar in prices, one in every 11 generic prescription drug has doubled in cost for them in the past year as well. Ellen Jean Hirst is a very accredited reporter and she cites many Chief Medical Officers and doctors who are also accredited.
Milmo, S. (2014). Tackling drug shortages. Pharmaceutical Technology Europe, 26(11), 14,16. Retrieved from http://ezproxy.philau.edu:2048/login?url=http://search.proquest.com/docview/1634480251?accountid=28402
This article gives a new outlook into why there are shortages and states that it is almost solely due to manufacturing difficulties. The article also further explains that there is a sure system that is preventing supply disruption and procedures for reporting potential shortages to the authorities. Manufacturing companies are required to warn authorities six months in advance when they foresee a drug shortage which they fail to do. The Drug Shortages Prevention Plan of the International Society for Pharmaceutical Engineering are simply recommending to focus more on the need for manufacturers to improve their quality systems, use metrics to identify and alleviate risks, and foster a corporate quality culture for improved communication with authorities on potential shortages. They are blaming the shortages solely on the failure for manufacturing companies and authorities to communicate. This is a perfect article to use for the section of the research paper regarding poor communication. Sean Milmo is a renowned freelance writer and is a trusted source.
Openshaw, M. S. (2005). The economics of prescription drug prices, government intervention, and the importation of drugs from Canada. Nursing Economics, 23(6), 307-11, 279. Retrieved from http://ezproxy.philau.edu:2048/login?url=http://search.proquest.com/docview/236938034?accountid=28402
It costs anywhere from $230 to $500 million dollars to develop a new drug. These manufacturers receive patents for the new drugs they create which allows them to control the selling price since there isn’t any competition. Manufacturers who don’t receive patents for new drugs still have to set their price high to supplement for all of the money spent developing the drug. However, since they don’t have a patent, generic brand manufacturers can replicate the same prescription drug and market it for a much lower price because they skipped out on all of the developing costs. Once the drug patent expires, manufacturers then move on to pursue more profitable drugs leaving generic manufacturers total control in the price of that prescription. This article was written in 2005 however, this information still holds true today. This is the typical life cycle of a prescription drug and how the prices can vary. This objective information is perfect for the ‘industry monopolies’ section of the research paper.
Schweitzer, S. O., PhD. (2013). How the US food and drug administration can solve the prescription drug shortage problem. American Journal of Public Health, 103(5), E10-E14. Retrieved from http://ezproxy.philau.edu:2048/login?url=http://search.proquest.com/docview/1349241529?accountid=28402 This article states that the drug shortage problem comes from the ‘perfect storm’ of 3 contributing factors. This includes a consolidation of generic drugs since there has been a reduced number of both buyers and manufacturers, an increased market of generic drugs, and an increase in dependence on outsourced raw materials. There has been mergers of small generic drug manufacturers who sold the same drug who can now control the price of that drug after eliminating competition, raising the prices at their own will. Outsourcing raw materials that are more difficult to get approved by the FDA causes stoppages in production and shortages in the drug itself. This article is perfect for the portion of the research paper regarding raw material shortages and poor communication between manufacturers and the FDA. Stuart Schweitzer is a Professor of Health Policy and Management with a Ph.D. and is a very reliable source for information pertaining to drug shortages and the FDA’s involvement.

Wilson, D. (2012). Deepening drug shortages. Health Affairs, 31(2), 263-6. Retrieved from http://ezproxy.philau.edu:2048/login?url=http://search.proquest.com/docview/921992670?accountid=28402
This article goes further into detail as to why the FDA is partly to blame. There are drug shortages due to inspection issues. The Food and Drug administration cause strain by refusing to change their standards. In fact, health groups encouraged them to cut down even more on factory inspections after recent deaths due to supposed contamination. While they are to blame, the article also backs the FDA from their perspective. They are often kept in the dark when it comes to production shortages and by the time they are informed, it is almost too late for them to step in and help in a timely manner. Manufacturers have stated that the FDA should hire more people to work in the drug shortages department however, it is nearly impossible for them to inspect manufacturers abroad where almost 80% of all raw materials come from. This article works for the poor communication section of the research paper. The author, Duff Wilson, is an investigative reporter and editor who has won many awards for his work in the industry and will be a great contributor for credible information for the research paper.