I agree with John Stanford’s essay in the Wall Street Journal today that controlling drug prices would slow biomedical innovation and and research. (WSJ 7/2/2020 – see link below.) When you spend less money on anything you will get less of it. But that’s okay. Today, we get more drug research and innovation than we want to pay for.
Most drugs approved by the FDA are required by law to be covered and paid for by Medicare and Medicaid regardless of price! Many are required by law to be covered and paid for by private insurance companies regardless of the price! This is true even when the drug provides little or no improvement over other existing approved drugs! Under such a situation we, of course, get maximum research and development.
If we did the same for space exploration, we would probably already have colonies on Mars. If we did the same for climate change, we would probably already have that problem solved. The point is that development of new prescription drugs is not our only priority, and our ability to pay is not unlimited.
We don’t have anything close to free market capitalism in the prescription drug market in the U.S. Government is already very involved, mostly providing subsidies, protection from competition, and other benefits to drug manufacturers. It is not unreasonable to set a drug price ceiling that is 20% higher than what is being paid by Australia, Canada, France, Germany and Japan. We can always make special exceptions for something like a vaccine against the Covid-19 virus.
Link to John Stanford essay in WSJ: