44323995 - medicines arranged in shelves at pharmacy

New Study Misdiagnoses Elevated U.S. Drug Prices

An interesting research article at the Health Affairs blog last week asserts there is no relationship between high U.S. prescription drug prices and drug companies’ research and development budgets. The point of the article is to debunk the argument that research-based drug companies must earn high profits if they are going to reinvest in R&D. While the data are correct, the article misunderstands the nature of capital markets.
As the authors point out, U.S. prices for patented prescription drugs are significantly higher, in real dollars, than prices in other developed countries. (Most observers claim this is because foreign governments impose price

Read more at The Independent Institute