Product Description

Breakthrough drugs have saved millions of lives and improved the health of countless people around the world. Unfortunately, they are also expensive, leading many political leaders to call for price controls, importation, or other procedures to reduce their cost. In Pharmaceutical Price Regulation: Public Perceptions, Economic Realities, and Empirical Evidence, John A. Vernon and Joseph H. Golec argue that price controls and other cost-limiting measures will starve pharmaceutical companies of the R&D money required to develop new drugs. A drug can cost $1 billion or more before it ever appears in the marketplace-and only three out of every ten new drugs ever recoup their development costs. This groundbreaking monograph demonstrates empirically how the free-market system of drug pricing is vital to the development of new breakthrough drugs.

Product Details

• Amazon Sales Rank: #1578443 in Books
• Published on: 2009-02-25
• Original language: English
• Number of items: 1
• Binding: Paperback
• 83 pages

Customer Reviews

A clear discussion of the costs you face by forcing price controls on drugs today
Economics is called the dismal science because it is a science that shows you that doors swing both ways. Rising prices help some and hurt others and falling prices flip the coin. Politicians are masters at fanning the flame of one party at the expense of the others in order to gain power and are never clear about the costs of what they are advocating. They usually underestimate them greatly and pretend that others simply do not exist. Politicians most often deal in fairy dust and perpetual motion machines rather than reality.

In our current shouting matches on health care we keep pointing to those who want cheaper drug prices as if it is their right to dismiss patents and the property rights of the shareholders who invested billons in creating that drug for them. This monograph from John Vernon and Joseph Golec, professors of healthcare, take us through the implications of putting price controls on drugs. They show you the COSTS of cheaper drugs that you don't see on the news. First and foremost, investors won't be putting up the billions to create those drugs and the creative people who discover and create them will move on to other fields where they can use their talents to prosper. The government cannot simply mandate those new drugs into existence nor can it spend enough of your tax dollars efficiently enough to create them. So, those supposed savings on drugs today are costing you cures and new drugs tomorrow. Oops.

Prices are signals to the market that there are needs that customers want met. High prices and profits provide incentives to companies to meet those needs right away before others meet them and prices decline through competition and substitution. While you can get away with distorting the market in the short term, you do so at a terrible future cost.

I hope you take the time to read this book and let your political representatives know you aren't buying into their hogwash.

Reviewed by Craig Matteson, Ann Arbor, MI

Breaks down both sides of the debate for voters' easy perusal
Regulation is a double-edged sword. "Pharmaceutical Price Regulation: Public Perceptions, Economic Realities, and Empirical Evidence" is an exploration of the regulation of prescription medicine in a world where these medicines are required to survive, yet prices for these drugs are typically astronomically high, and all too often health insurance refuses to pay. Regulation could change that, but regulation comes with its own baggage that worries many. "Pharmaceutical Price Regulation" breaks down both sides of the debate for voters' easy perusal, and is highly recommended.