U.S. pharmaceutical policy in a global marketplace.
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.
Lakdawalla
Darius N
DN
Bing Center for Health Economics, RAND in Santa Monica, California, USA. darius@rand.org
Goldman
Dana P
DP
Michaud
Pierre-Carl
PC
Sood
Neeraj
N
Lempert
Robert
R
Cong
Ze
Z
de Vries
Han
H
Gutierrez
Italo
I
D003132:Commerce; D017047:Cost Sharing; D005060:Europe; D006801:Humans; D038622:Internationality; D008136:Longevity; D008875:Middle Aged; D010593:Pharmaceutical Services / Q000331:legislation & jurisprudence*; D011050:Policy Making; D014481:United States