Society Not Likely to Benefit From Government Say in Drug Pricing

Little evidence suggests that US government regulation of prescription drug prices would offer a net benefit to society, according to a critical review and of the literature published in Research in Social and Administrative Pharmacy.

The review and commentary tackles four arguments for increased government involvement in drug prices: pharmaceutical industry profits, government funding of research, “me-too” products, and pharmaceutical advertising.

“Literature indicates that drug companies have consistently made higher profits than companies in other industries,” wrote Julie A. Patterson, PharmD, PhD, and Norman V. Carroll, PhD, both of Virginia Commonwealth University School of Pharmacy, Richmond, Virginia. “Research suggests that the magnitude of that difference may be smaller than typically reported,” although data on how much so is inconsistent, according to the review.

Restrictions on drug advertising or on the development of “me-too drugs” — drugs with similar mechanisms of action to approved drugs in a therapeutic class — would have little effect on drug prices, the review states. Meanwhile, government involvement in the pricing of drugs developed with research funded by the government “has been tried,” the authors wrote, “and found neither effective nor workable.”

The main effects of government involvement in the pricing of prescription drugs, the review posits, would be decreased research and development (R&D) and fewer new medications.

“The impact of reduced R&D would, in turn, depend on the degree to which lower profits and R&D investments would stymie the development high-value, innovative new products or simply decrease the output of low-value duplicative products,” they wrote.

Reference

Patterson JA, Carroll NV. Should the United States government regulate prescription prices? A critical review. Res Social Adm Pharm. 2020;16(5):717-723. doi:10.1016/j.sapharm.2019.06.010