Through the lens of social contract perspectives, it is not surprising that the Hatch-Waxman Act was created. The 1960’s through 1980 was a time of egalitarian contracts by which social inclusion was the norm (Teitelbaum & Wilensky, 2013). Enhancing access to health care for all American citizens is one of the many great benefits to this perspective (Teitelbaum & Wilensky, 2013). The Hatch-Waxman Act at the time of enactment would allow for decreased healthcare costs and increase drug availability (Meagher, 2017). One of the large drawbacks to the social contract perspective is that the autonomy of physicians supersedes that of healthcare expenditure (Teitelbaum & Wilensky, 2013). In terms of the Hatch-Waxman Act, absolute physician control may place vulnerability on the general public. For example, under the social contract perspective, physicians may prescribe name-brand pharmacologic agents despite the availability of generic drug equivalencies.
Another major drawback under the social contract perspective is the inherent creation of monopolies by the Hatch-Waxman Act (Meagher, 2017). Meagher (2017) outlines that various loopholes in the Hatch-Waxman Act, specifically through patent extensions, Pharmaceutical company Mylan was able to the increase the market price of its anaphylaxis drug EpiPen from $100 in 2012 to $609 per dose in 2016 (Meagher, 2017). In an interview with N. O’Donnell (2017) Mylan Pharmaceutical CEO Heather Bresch accounted for the increase in price to the advancements in the drug manufacturing process. Bresch also cited the primary reason for the 488% hike in price was to increase awareness and make the drug readily available for the entire population. Meagher (2017) comments that this outlines some of the many weaknesses in the Hatch-Waxman Act which can no longer be applied in today’s marketplace.
Under the social, political and economic theoretical framework, the Hatch-Waxman Act can also be categorized using the free market perspective. According to Teitelbaum & Wilensky (2013), under the free market perspective, healthcare services function best when it is deregulated promoting commercial competition. An advantage to this perspective is that competition will indeed drive down the price of goods and services. In addition, this competition helps to empower the consumer to make choices for what they determine to be the best option. However, empowerment by the consumer operates under the assumption that the consumer is well informed. This may be difficult in the realm of prescribed pharmaceuticals because as described earlier, physician autonomy can be greatly impacted. As described by Teitelbaum & Wilensky (2013) this framework may unintentionally lead to inflation of healthcare costs.
According to Kesselheim, Avorn, & Sarpatwari (2016), a multimodal approach must be taken to decrease rising drug prices in America. They argue that firstly fair competition should be reintroduced back into the marketplace inevitably abolishing our current monopolies. Secondly, the government should have a greater influence on market pricing by revising policies that allow permissive overpricing without negotiation. Lastly, Kesselheim, Avorn, & Sarpatwari (2016) advocate for better dialogue between the physician and the patient. They note that often, prescribers do not discuss drug costs or therapeutic alternatives with patients further compromising the patient autonomy.
The Hatch-Waxman Act helped to create a thriving pharmaceutical industry in America (Mossinghoff, 1999). The primary goals of increasing marketplace generics while innovating new pharmacologic agents were achieved but with a cost. There is little evidence to prove that that pharmaceutical policy reformation will hamper innovation (Kesselheim, Avorn, & Sarpatwari, 2016). In a market that is heavily influenced by several single entities dictating the costs of vital drugs in America, change is needed to ensure the health, safety, and welfare of the general public.
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