Health Affairs, 27, no. 1 (2008): 122-129 doi: 10.1377/hlthaff.27.1.122 © 2008 by Project HOPE	New Online   Senate Health Reform Bill   Rewarding Providers   Public Option Policy Brief   Health Reform & Abortion   Delivery System Reform

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Drugs & Vaccines

Drug Licenses: A New Model For Pharmaceutical Pricing

High drug prices are a major barrier to patients’ access to drugs and compliance with treatment. Yet low drug prices are often argued to provide inadequate incentives for innovation. We propose a drug-licensing model for health care, which has the promise of increasing drug use without altering patients’ out-of-pocket spending, health plans’ costs, or drug companies’ profits. In such a model, people would purchase annual drug licenses that would guarantee unfettered access to a clinically optimal number of prescriptions over the course of a year. Using the example of statins, we illustrate how such a model could be implemented.

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