Government intervention in controlling prices of drugs in the United States
Price control in the pharmaceutical industry in the United States has in the recent past become a pressing issue. The pharmaceutical industry remains the only one in the whole world where the prices of drugs are unregulated (Temin 24). Governments in other markets regulate the prices of drugs either indirectly or directly. In Japan and Germany for instance, the government puts the limit on reimbursement from social insurance scheme. United Kingdom on the other hand regulates prices of drugs directly through profit control. Price regulation has become a contentious public issue leading to the question of whether US should join other countries in regulating prices of drugs. This paper seeks to establish the impacts of government intervention to control prices of drugs in the United States and implications to the cost of healthcare for the Americans.
Currently, the pharmaceutical sector is faced faces numerous market inefficiencies including unfair prices and issues with t quality and safety of drugs. Government intervention in controlling the prices of drugs is inevitable to eliminate the market inefficiencies as well as reducing the risks to the end users of drugs (Angell 135). Supporters of price control policy argue that the price of drugs is excessively high in the US, and attempts by the government to regulate prices would increase affordability of healthcare for all citizens. Opponents of price control policy on the other hand argue that controlling prices would diminish the incentive to invest in research and development based for drugs.
Although the private sector has in the past executed policies geared towards reducing the price paid by consumers of drugs, it has not adequately been able to internalize the problem due to political influence among other factors (Temin 32). The government can adopt similar policies that have been used by the private sector to significantly bring down the prices of prescription drugs without necessarily disrupting competitiveness of the industry.
Works Cited
Angell, Marcia. The Truth About the Drug Companies: How They Deceive Us and What to Do About It. New York: Random House, 2004. Print.
Temin, Peter. Taking Your Medicine: Drug Regulation in the United States. Cambridge, Mass: Harvard University Press, 1980. Print.