High Prices Today, Effective Drugs Tomorrow

A few days ago, Sarah Kliff of Vox published a sort of cartoon guide to pharmaceutical pricing, which I recommend. The basic arguments will probably be familiar to readers of this column, but her stick figures make an important point: When we talk about what to do about pharmaceutical prices, we have to think hard about the trade-offs we’re willing to make.

America pays higher prices for drugs because the government doesn’t negotiate with insurers. The government doesn’t negotiate with insurers in part because we have a powerful pharmaceutical industry that lobbies the government not to, but also in part because we’re not willing to have the government say, “Nope, we’ve decided you can’t sell your expensive treatment here,” which is a major way that other governments get their bargaining power. Telling Americans they can’t have stuff is really politically unpopular, so we mostly don’t do that. Instead, we pay some of the highest prices in the world for prescription drugs.