Prescription Drugs Price Controls Could Have Adverse Effect On Life Spans

Ruzanna Harutyunyan's picture
Advertisement

Placing price controls on prescription drugs in the U.S. would result in modest cost savings but would shorten life spans as the pace of drug innovation slowed, according a study in Health Affairs, Reuters reports. Some policymakers recently suggested that the U.S. develop a form of prescription drug price regulation as a way to slow rising costs, according to Reuters.

For the study, Darius Lakdawalla of RAND and colleagues used computer models of price regulation in 19 countries to simulate controls in the U.S. Researchers said that introducing price regulations to a mostly unregulated market in the U.S. would lead to less investment in creating lifesaving drugs, which in turn could reduce life expectancy.

Advertisement

Lakdawalla said, "We found policies that regulate the prices of drugs could result in modest savings for consumers, in the best cases on the order of $5,000 to $10,000 per person over a lifetime. But in many other cases, those policies resulted in very substantial losses to consumers in the form of reduced life expectancy and those would be worth tens of thousands of dollars."

According to Lakdawalla, a better approach to moderating prescription drug prices would be to cut drug insurance copayments by 20%, which by 2060 would increase life expectancy in the U.S. by half of a year because more people would take needed drugs and drug industry profits would motivate further innovation.

In a commentary accompanying the study, F.M. Scherer of Harvard University questioned some of the researchers' assumptions, including the rate of declining drug company profits leading to less innovation.

Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at kaisernetwork.org/email . The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2007 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

Share this content.

If you liked this article and think it may help your friends, consider sharing or tweeting it to your followers.
Advertisement