Today, the Senate Finance Committee holds hearings to markup its ambitious drug pricing overhaul package. This represents perhaps the clearest and more comprehensive drug pricing legislative package to date. Rather than detailing each provision of the package, which is likely to meaningfully change throughout the legislative process, it’s useful to take a step back and consider a framework for evaluating the economic fundamentals driving drug pricing policy.
Experts like to say drug pricing is complicated. In reality it’s not – the “secret” of drug pricing boils down to a simple question of which drugs society wants to say “no” to. There are no free lunches here. Depite the empty promises of both sides, Americans cannot have lower prices, access to all of the drugs that exist today, and the same rate of innovative investments in new prodcuts. We must make some grown up choices.