Health Affairs

Health Affairs, 28, no. 1 (2009): w138-w150 (Published online 16 December 2008) doi: 10.1377/hlthaff.28.1.w138 © 2009 by Project HOPE	New Online   Getting Health Reform Done   After the State of the Union   Incremental Reform   E-Health in Developing World   Most-Read Articles in 2009

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U.S. Pharmaceutical Policy In A Global Marketplace

Darius N. Lakdawalla, Dana P. Goldman, Pierre-Carl Michaud, Neeraj Sood, Robert Lempert, Ze Cong, Han de Vries and Italo Gutierrez

U.S. consumers generate more pharmaceutical revenue per person than Europeans do. This has led some U.S. policymakers to call for limits on U.S. pharmaceutical spending and prices. Using a microsimulation approach, we analyze the welfare impacts of lowering U.S. prices toward European levels, and how these impacts vary with key modeling assumptions. Under the assumptions most favorable to them, price controls generate modest benefits (a few thousand dollars per person). However, for the remainder of plausible assumptions, price controls generate costs that are an order of magnitude higher. In contrast, publicly financing reductions in consumer prices, without affecting manufacturer prices, delivers benefits in virtually all plausible cases.

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This article has been cited by other articles:

				N. Sood, H. de Vries, I. Gutierrez, D. N. Lakdawalla, and D. P. Goldman The Effect Of Regulation On Pharmaceutical Revenues: Experience In Nineteen Countries Health Aff., January 1, 2009; 28(1): w125 - w137. [Abstract] [Full Text] [PDF]

				F.M. Scherer Price Controls And Global Pharmaceutical Progress Health Aff., January 1, 2009; 28(1): w161 - w164. [Abstract] [Full Text] [PDF]

				A. Jayadev and J. Stiglitz Two Ideas To Increase Innovation And Reduce Pharmaceutical Costs And Prices Health Aff., January 1, 2009; 28(1): w165 - w168. [Abstract] [Full Text] [PDF]