|Selected research from leading health care experts whose findings have a direct bearing on public policies effecting medical progress. Research is chosen based on its quality and relevance by the Medical Progress Today editorial staff.||
The Economics of Price Regulation and Innovation
This paper examines the potential effects of price controls on drug development and theorizes that if a company operates in an environment with price controls it will react by reducing R&D investment; focus on developing drugs for the largest markets (rather than small or developing markets); and pursue products that would require less development time. Given the fact that the U.S. is the single most important, and last unregulated, market for pharmaceuticals, price controls in the U.S. would have a disproportionately large effect on global R&D investment. In short, "there is no doubt that price controls in the United States would have a detrimental effect on what has been, up to now, an extremely productive industry."
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