Government Intervention in Drug Pricing

Scott Gottlieb, MD, and Ted Okon, MBA, discuss controversies surrounding a proposed legislative amendment that would allow the government to negotiate drug prices with pharmaceutical companies.

Government intervention in drug pricing would impede fair market competition, remarks Mr Okon. Dr Gottlieb and Mr Okon further discuss how the government’s control of drug pricing may affect innovation. Together, they conclude that pricing controls may affect pharmaceutical companies’ decision making regarding drug contracting and pricing. As an example, Dr Gottlieb highlights the effects of the Medicaid “best price” system.

Dr Gottlieb explains the importance of a fair market and competitive pricing scheme and their effects on insurance companies, pharmacy benefit managers, and other stakeholders in healthcare, and suggests that these are potential market-based answers to the question of how to make healthcare more affordable.