This is the Healthcare Delivery Providers, part of the Healthcare Marketplace Specialization. This is module 5.1.5, Pharmaceuticals & Devices. Learning outcome will be, we will review how pharmaceuticals and device companies impact healthcare delivery providers. Where the pharmaceutical's used, of course, throughout the care continuum and at home, and where the device is used in the hospitals, the surgery center, urgent care, and all over. So again, there's a prevalent throughout the healthcare delivery value chain. Let's start with the pharmaceutical companies. These are companies that develop, produce, and market drugs for use as medications. They spend a lot of money in research and development, but also, they have a lot of regulations, and they have a lot of work to do before bringing a medication to market. And they have to work with the Federal Food and Drug Administration Department to get their approval before a medication can reach a human being. The other big player in the pharmaceutical arena. Is what's called the pharmacy business managers, so these are third party administrators that process and pay for prescription drug claims. So think of them as insurance companies that have to deal with medications and pharmaceuticals. They have very strict rules around formulary development, so they have a list of medications that they approve and a list that they do not approve. And they maintain that formulary very carefully, and then finally they contract with local pharmacies in order to make sure that the right medications reach the right patients. Pharmaceutical companies, they impact healthcare by, directly by the cost of medications. And one of the things that has been noted, and is being looked at is the rising cost of medications in the United States, and again, there are many reasons behind that, but it's a debate that's happening now. The other thing that is being looked at is brand name pharmaceuticals versus generics. So generic medications are those that have their patents expired and they can be manufactured by other companies and are distributed widely. Typically, the price of a generic is lower than a brand name pharmaceutical. As we've discussed there's a lot of regulations both federally and otherwise on the pharmaceutical companies and the pharmaceutical value chain. Also, there's a debate around, is direct to consumer marketing regarding pharmaceuticals okay. So currently in the US, there's a lot of marketing happening on television, radio, regarding new and expensive medications directly to the consumer. The consumer then goes to the physician and demands that medication. So again, there are many pro's and con's to that that are being debated and looked at, especially as it relates to increasing the overall total cost of care for the country. Finally, pharmaceuticals obviously innovate quite a bit so they do R and D they bring new pharmaceuticals to the market and lead in treating and providing medical care for difficult illnesses in service of humanity. Next let's turn to device companies. United States is the largest medical device market in the world. These companies are various devices, large and small, for example, electro-medical equipment like the pacemaker that was placed in Harlan Reeves, x-ray equipment of all types, instruments that are used in the emergency department in the operating rooms, all types of surgical supplies, and dental supplies, and many, many more. Issues we have to think about around device companies are patents and patent management also a lot of regulations similar to the pharmaceutical industry. Also there's been a debate and a review of the physician involvement and physician preference and device companies. So decades ago, physicians were paid or were incentivized to use various different devices. And all of that now is being very strictly looked at by the federal government in the United States and is being monitored and regulated. Also, as you can imagine in device companies, there's a lot of competition for devices because a lot of these are high margin items, and on the other hand, there is definitely a commoditization of many devices. And hence, the price of those is steadily going down, which again forces the device companies to continue to innovate, come out with higher margin products. And that dynamic is really playing off now, especially in the context of healthcare costs. In summary, the pharmaceutical companies and device companies are key stakeholders in the healthcare delivery system, and they affect the delivery system providers both directly and indirectly.