In response to increased public pressure, both Congress and the Trump Administration have recently promoted efforts to reduce the price of prescription drugs in the United States. Several other countries have already imposed measures of their own.

Fact of the Week: Artificial Price Controls Could Lower the Number of new Drugs by 3 to 5 Percent Over the Next Decade

Debates over high-priced prescription drugs tend to focus on whether the government should attempt to constrict the pharmaceutical industry, whether by reducing patent protections or by mandating lower prices. What these conversations miss, though, is that drug prices could also fall through the expansion of the pharmaceutical industry, rather than its restriction.

Fact of the Week: In 2017, FDA Approved 46 New Drugs and Over 1,000 Generic Drugs

Proponents of capping drug prices often dismiss concerns about the impact on pharmaceutical R&D by pointing to the fact that drug prices are much lower internationally than in the United States. But this reasoning fails to consider that price restrictions in other countries have made pharmaceutical companies disproportionately reliant on revenue from the United States.

Fact of the Week: A 40 Percent Reduction in US Drug Prices Would Lead to as Much as 60 Percent Fewer Novel Compounds Reaching Clinical Testing

Debates over drug pricing often consider the impacts on health and innovation, but rarely examine the costs those drugs offset. According to new research examining drug releases for 67 diseases across 15 countries in the three decades from 1982 to 2015, these offsets are dramatic.

Fact of the Week: New Drugs Led to 163 Percent Fewer Days of Hospital Care in 2015

This growth comes with real-world improvements to patient outcomes. The decade from 2010 through 2019 saw a 60 percent increase in new drug approvals compared to the previous decade.

Fact of the Week: The Pharmaceutical Industry Invested $83 Billion on R&D in 2019, a Tenfold Increase Since the 1980s

When factoring in the high value of positive externalities created by new drugs, consumer prices become a small price to pay for the wealth of private and public benefits that biopharmaceutical innovations create.

Fact of the Week: Biopharma Innovations Shrank the Population Unable to Work or Go to School by 4.5 Percent Over 15 Years

The pharmaceutical and medicine industry has seen its productivity decline by 2.4 percent annually between 2014 and 2024, one of the worst performances among U.S. manufacturing industries.

Fact of the Week: Productivity in the Pharmaceutical and Medicine Industry Fell by 2.4 Percent Annually Between 2014 and 2024

A report from the Congressional Budget Office suggests that on average, a 1 percent increase in prescriptions was associated with a 0.2 percent decrease in spending on other medical services.

Fact of the Week: A 1 Percent Increase in Drug Prescriptions Can Reduce Spending on Other Medical Services by 0.2 Percent

If drug price controls were lifted throughout the OECD, the number of new treatments available would increase 8 to 13 new drug compounds by 2030, writes John Wu in Innovation Files.

Fact of the Week: If Drug Price Controls Were Lifted Throughout the OECD, the Number of new Treatments Available Would Increase 9 to 12 Percent by 2030

Fact of the Week: The Price of Drugs Has Increased 40 Percent Less Than the Average US Product

Related

Fact of the Week: Artificial Price Controls Could Lower the Number of new Drugs by 3 to 5 Percent Over the Next Decade

Fact of the Week: In 2017, FDA Approved 46 New Drugs and Over 1,000 Generic Drugs

Fact of the Week: A 40 Percent Reduction in US Drug Prices Would Lead to as Much as 60 Percent Fewer Novel Compounds Reaching Clinical Testing