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Abstract

High and rising prescription drug costs have become a preoccupying policy problem in the United States. Notwithstanding broad, bipartisan interest in finding effective policy solutions, several aspects of the drug affordability problem make it an uncommonly difficult one to solve. This article reviews the moral, market, and political factors contributing to the difficulty. Among the moral problems is lack of agreement about how to weigh the fundamental tradeoff involved in regulating drug prices—affordability versus incentives for innovation—and about what constitutes a fair price. Market-related factors include the lack of price transparency and a myriad of perverse incentives in the system through which prescription drugs are supplied to patients. Finally, current policy choices are constrained by past political compromises, and an atmosphere of scandal focusing on egregious instances of price gouging has made rational deliberation about fixes to deeper problems in the system difficult.

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2020-01-06
2024-04-14
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