How to Keep Drug Prices Down

Dean Baker How to Keep Drug Prices DownThe New York Times ran a piece discussing the efforts by various industry groups to ensure that they are not hurt by measures that reduce prescription drug prices. At one point, it listed some of these measures, noting a bill co-sponsored by Senator Bernie Sanders, which would allow drugs to be imported from Canada.

It is worth noting that this bill, which is co-sponsored by sixteen other senators including Elizabeth Warren, Sherrod Brown, and Kirsten Gillibrand, also includes mechanisms that would reduce the cost of drugs by not granting them patent monopolies that make their price high in the first place. One proposal would create a prize fund, which would allow for the patents on important new drugs to be purchased by the government and placed in the public domain. They could then be sold as generics as soon as they are put on the market.

The other provision would have the government finance some clinical trials of drugs after securing all patent rights. In this case, also the new drugs would be sold as generics. By paying for the trials (which would be conducted by private companies under contract), the government would be able to require that all test results were in the public domain.

This would allow doctors and other researchers to be able to determine if a particular drug was better for men than women, or appeared to cause bad reactions when mixed with other drugs. As it stands now, drug companies only have an incentive to publicly disclose information that they think will help them market their drugs. If the government paid for some number of clinical trials, it could help to set a new standard of disclosure with its practices, in addition to making new drugs available at generic prices.

–Dean Baker
The Best Way To Bring Down Drug Prices, Don’t Grant Patent Monopolies

1 thought on “How to Keep Drug Prices Down

  1. Christ, Democrats:

    One begins to wonder if some of these people aren’t just bought and paid for — it’s almost if they have a paralyzing fear that, if the Democrats actually ever did something major to benefit Americans which nicked corporate profits a bit, the jig would be up. Voters might start demanding more such legislation, and that simply wouldn’t do. Better to keep running on “we are all that protects you from the evil Republicans,” which is ceaselessly effective. After all, Democrats are terrible at protecting Americans from Republicans, emboldening the GOP to get ever crazier, which makes the selling point more potent.

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