title: U.S. pharmaceutical policy in a global marketplace.
abstract: 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.
authors.affiliation: Bing Center for Health Economics, RAND in Santa Monica, California, USA. darius@rand.org
authors.forename: Darius N
authors.initials: DN
authors.lastname: Lakdawalla
authors.forename: Dana P
authors.initials: DP
authors.lastname: Goldman
authors.forename: Pierre-Carl
authors.initials: PC
authors.lastname: Michaud
authors.forename: Neeraj
authors.initials: N
authors.lastname: Sood
authors.forename: Robert
authors.initials: R
authors.lastname: Lempert
authors.forename: Ze
authors.initials: Z
authors.lastname: Cong
authors.forename: Han
authors.initials: H
authors.lastname: de Vries
authors.forename: Italo
authors.initials: I
authors.lastname: Gutierrez
mesh_terms: 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