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A useful look at the healthcare industry including a history of its move toward vertical integration in the 1980's and its retrenchment in the 1990's, analyis of the issues involved and some predictions for the future.

Medicines play an important role in public health care programs, saving lives and drawing people to health facilities, where they can also receive preventive treatment. Medicines can also help keep health care costs down. Many insurance carriers would rather pay for drug treatment than for potentially risky and more expensive surgery. And the cost of complications from not treating illness with medicine in the early stages can ultimately be double or triple the expense.

But the high cost of medicines is putting increasing pressure on health care budgets. For example, in many industrialized nations the elderly population (those older than 65) is expected to double in the next 50 years. Usually, this segment of the population has approximately four times the health care expenditures of those under 65 years. Additionally, in many developing economies, the epidemiological profile is changing - evolving from infectious and less expensive diseases, which can be treated through massive national campaigns, to chronic degenerative diseases such as cancer and diabetes, which are more expensive to treat.

This paper discusses ways to improve the medicine supply chain in developing a seven-point solution to relieving pressure on health care budgets in these countries, the cost of medicine and improving key elements of the drug supply chain.