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Government Pharmaceutical Development to Address High Prices: Challenges Ahead
1Program On Regulation, Therapeutics, And Law (PORTAL), Brigham and Women's Hospital and Harvard Medical School, 1620 Tremont St., Suite 3030, Boston, MA, 02120, USA. jjdarrow@bwh.harvard.edu.
Therapeutic Innovation & Regulatory Science
|July 15, 2021
Summary
Government drug development may not lower prices, as many costs persist and inefficiencies could increase. This approach is unlikely to improve drug innovation or reduce long-term expenses.
Area of Science:
- Health Economics
- Pharmaceutical Policy
- Drug Development
Background:
- Government intervention in medicine development is proposed to reduce drug prices.
- Proposals assume current market prices exceed justified development costs.
Purpose of the Study:
- To evaluate the economic impact and feasibility of government-led drug development and manufacturing.
- To assess whether government involvement can lower new medicine costs and improve innovation.
Main Methods:
- Analysis of cost structures in new drug development.
- Evaluation of potential inefficiencies from government involvement in research allocation and manufacturing.
Main Results:
- Government drug development may not significantly reduce overall costs, with some costs potentially increasing.
- Increased government involvement could exacerbate inefficiencies due to factors like lobbying.
- Government manufacturing is unlikely to yield long-term benefits in cost reduction or innovation.
Conclusions:
- Government development and manufacturing of new medicines may not be an effective strategy for lowering drug prices.
- Potential inefficiencies and persistent costs challenge the economic viability of government intervention in the pharmaceutical sector.
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