https://issuesinsights.com/2020/01/30/feeling-the-pain-of-high-drug-prices-we-prescribe-market-forces/
Trump administration officials keep searching for solutions to rising prescription drug prices, which are increasing faster than inflation. “Drug makers and companies are not living up to their commitments on pricing. Not being fair to the consumer, or to our Country!” President Donald Trump tweeted last year.
However, it’s hard to know what “fair” prices are. After all, pharmaceutical research and development is expensive and high risk. Bringing a drug to market may take 10 or more years and costs, on average, more than $2.5 billion. Most of the administration’s suggested remedies have been threats of the imposition of various types of price controls. (Predictably, those proposed by the Democrat presidential hopefuls have been much more draconian.)
A conservative, reform-minded administration should know better than to go down the path of innovation-stifling, heavy-handed government intervention. Responsible regulatory reform is a better way to foster pharmaceutical innovation, drive prices down, and help patients.
We suggest two ways to do that.
The first would be to correct a glitch in patent laws. Patents are granted to inventors by the U.S. Patent and Trademark Office if their product or process is judged to be useful, novel and non-obvious. The driver of pharmaceutical R&D investment is the promise that after a drug receives Food and Drug Administration approval, a manufacturer will be able to market it exclusively, without generic competition, for a period of time at the price it chooses. After the patent expires, the introduction of generic versions of the drug reduces drug prices dramatically.
