Jason Shafrin
That is the topic of a U.S. Senate hearing last week. One person testifying was an economist, USC Professor Darius Lakdawalla. While his full testimony is here, his key points of contention are worth reading. These include:
- The challenge for public policy is to sustain the pace of medical innovation while ensuring that valuable new technologies remain affordable and accessible.
- The U.S. is by far the largest market for pharmaceuticals in the world and the engine of global pharmaceutical innovation. Other countries, in effect, free ride off the innovation stimulated by the American market.
- Despite stable or falling net prices paid to prescription drug manufacturers over the past decade novel medicines lie increasingly beyond the financial reach of American patients.
- Blunt price controls are not the solution to the worsening affordability of prescription drugs or to global free-riding: Schaeffer Center research suggests that introducing European-style pricing policies would reduce Americans’ life expectancy. …
