Pharmacy in North America

In the USA there are fundamentally two types of health care system. The privatised health care system, encompassing 80% of the population, is financed by premium payments. The other system, covering 20% of the population, is financed by the government schemes: Medicare and Medicaid. In the Medicare system free inpatient medicines and hospital treatment are provided to those aged 65 and over and the disabled.
It excludes several types of treatment and nursing homes. 

The Medicaid programme provides medical cover for poor people aged under 65 years who cannot afford to pay insurance premiums. In the privatised systems, a premium is paid based not on the ability to pay but on the services required and the probability of being sick. With insurance schemes a health premium is paid to an insurance company and the individual is free to go to any doctor or hospital for treatment. 

Insurance companies pay the bill. This has the disadvantage of high costs for the insurance company as there is no direct control on the provider of health care. In health maintenance organisations (HMOs) the health insurance company and the provider of health care have a contract with each other. The individual is restricted to the doctors and hospitals nominated by the insurance company. HMOs have subsequently become managed care organisations (MCOs) (see later).

Health care in the USA is provided by a range of differing organisations Pharmacy as a component of the overall health care system must be compatible with it. Growing expenditure on pharmaceuticals over the last decades has motivated employers,insurers and managed care organisations to better manage this cost. Between 1980 and 1990 prescription expenditures grew by an average of 9% per year, with prescription
prices outpacing nearly all other goods and services during the same period, the total prescription drug expenditures reached $93.4 billion in 1998. 

The US pharmaceuticals market is comprised of several sub-markets. There is the conventional fee-for-service sector where there are usually only two parties, the prescriber and the patient. Here, a branded drug product is usually prescribed, free from any formulary or other controls. The patient pays for such medications out of their own pocket, or in some cases, is partly or wholly reimbursed by an indemnity health insurer. 

A second market is the institutional one, including hospitals, long-term care facilities, governmental facilities, prisons, the military, and veterans care centres. Most often, these large buyers make purchase decisions based upon annual tenders or solicited bids and use generic products wherever possible. 

A third market is the managed care market where branded and generic products are used, based upon negotiations between manufacturers and managed care organisations, regarding price, rebates and market share requirements. If an HMO was able to guarantee that a particular product would maintain 90% of its therapeutic category sales, that HMO would be able to purchase that product for its patients at a lower price than an HMO guaranteeing a market share of 60%.


by Umaee

source: Pharmacy Practice
image: pharmacytechniciat***.com

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