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Why are U.S. prescription drug prices by far the highest in the world? – Healthcare Economist

this is a topic The U.S. Senate held hearings last week. One of the testifiers was Darius Lakdawalla, an economist and professor at the University of Southern California.Although his full testimony was here, the points of his argument 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 world's largest pharmaceutical market and the engine of global pharmaceutical innovation. In effect, other countries free ride on the innovation spurred by the U.S. market.
  • Although the net prices paid to prescription drug manufacturers have stabilized or declined over the past decade, new drugs are increasingly beyond the financial reach of U.S. patients.
  • Blunt price controls won't solve worsening prescription drug affordability or the global free-rider problem: Research from the Schaeffer Center shows that introducing European-style pricing policies would shorten American life expectancy.
  • Conversely, aligning drug prices with actual value provided to patients stimulates innovation that benefits patients and discourages innovation that does not benefit patients.
  • Legislation to increase drug price transparency, coupled with better value information,
    Helps payers and consumers spend their money wisely.
  • Affordable and generous prescription drug coverage ensures medications stay within their expiry date
    The economic capabilities of American families.

You can read the full testimony here herefull of hyperlinks to interesting articles.

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