That is the theme of a US Senate hearing last week. One of the people who testified was economist, USC professor Darius Lakdawalla. Although his full testimony is here, its key points of controversy are worth reading. These include:
- The challenge for public policy is to maintain the pace of medical innovation while ensuring that valuable new technologies remain affordable and accessible.
- The United States is by far the largest pharmaceutical market in the world and the engine of global pharmaceutical innovation. Other countries, in fact, take advantage of the innovation stimulated by the US market.
- Despite stable or declining net prices paid to prescription drug manufacturers over the past decade, new drugs are increasingly out of the financial reach of American patients.
- Strict price controls are not the solution to worsening prescription drug affordability or global free riding: Schaeffer Center research suggests that introducing European-style pricing policies would reduce Americans’ life expectancy.
- Instead, aligning drug prices with the real value provided to patients encourages innovation that benefits patients and discourages innovation that does not.
- Legislation to increase transparency of drug prices, along with better information on value,
can help payers and consumers spend their money wisely. - Affordable and generous prescription drug insurance ensures that medications stay within the
financial reach of American families.
You can read the full testimony hereFull of hyperlinks to interesting articles.
