NEJM -- Prescription-Drug Prices

Posted by Clark Venable on 10/8/2004

NEJM -- Election 2004: Prescription-Drug Prices (available free):

""At first blush, Kerry's positions appear to be more "consumer friendly" than Bush's. Kerry supports policies that create stronger downward pressure on prescription-drug prices than Bush's policies do. This more aggressive stance toward controlling today's drug prices must be considered in light of the effect of lower prices on the flow of new drugs that will be available to the next generation of consumers. Bush supports policies that protect the existing drug-price structures in the name of ensuring adequate economic incentives to innovate.

"The United States is entering uncharted waters in both of these key areas — the importation of prescription drugs and the role of the government in controlling their cost. A voter's choice between the candidates might well be guided by philosophy and a sense of whether profits in the pharmaceutical industry are high enough so that reductions in drug prices would not substantially impede the development of future drugs.

"Importation would have some predictable consequences: U.S. prices would decrease, the world would move toward a single price for a given drug, and Canada and Europe would probably make larger contributions toward the cost of research and development. The magnitude of the financial gain in the United States, however, is uncertain; my guess is that there would be modest price reductions for consumers in the United States and substantial price increases for Europeans and Canadians." "

The fly in the ointment here is the American health consumer's desire to have the best medical care in the world, have it for free, and have it now. I think they like the idea that drugs will be cheaper---even if it means having fewer 'new' drugs going forward. There are great drugs in the pipeline. Great new ideas for how to better treat asthma and diabetes and heart disease. They'll still be there, but will it be as soon if we reduce the premium drug companies charge for new drugs? I don't think so. I personally would favor streamlining the drug approval process and shortening the time until generics are available first.

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