U.S. Pharmaceutical Policy In A Global Marketplace

TitleU.S. Pharmaceutical Policy In A Global Marketplace
Publication TypeJournal Article
Year of Publication2009
AuthorsLakdawalla, DN, Goldman, D, Michaud, P-C, Sood, N, Lempert, R, Cong, Z, de Vries, H, Gutierrez, I
JournalHealth Affairs

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.

Endnote Keywords

pharmaceutical spending

Endnote ID


Citation Key7417