Congress needs to increase price controls on pharmaceutical companies.

This all started when my mom told me that we couldn’t get another refill of my prescription allergy medication because it costs too much. And then my friend told me how someone she knew couldn’t get their Adderall refilled because of the shortage and high cost of ADHD medications. Sure, I may be able to coast by this semester if I ration my medication, but I and the thousands of people who can’t get their medications shouldn’t have to worry about running out to begin with. Medications are necessities that are becoming increasingly unaffordable and the fact that people who have it significantly worse than I do are struggling. 

In addressing pharmaceutical price controls, it is important to recognize who sets the prices, why they cost so much, and what the government can do about them. 

For any type of good, the producer sets the baseline price and every seller, distributor, and other types of middlemen marginally increase the price as well. But pharmaceutical companies set a much higher baseline price. This largely goes to the extensive research and development of pharmaceutical products as it takes much more time and research to create a drug or method that will fix or adjust an ailment. Not only that but the materials and methods used to create the final product are expensive in and of themselves. On top of that, pharmaceutical companies must make sure it complies with FDA regulations and gets approved by the FDA for public consumption. Essentially, every factor that goes into making medication is costly, pushing for the retail price to likewise be costly. 

Historically, the government has stayed out of price controls on pharmaceuticals because it would disrupt the laissez-faire capitalist nature of the American economy. As such, the government has stood by and watched as fewer and fewer people can afford the medications and treatments they need to survive. 

In researching this ongoing issue that has existed in the U.S. for decades, I pulled two books. The first is Pharmaceutical Price Regulation by Patricia M. Danzon. Danzon is an economist and professor at the University of Pennsylvania, Wharton where she specializes in biopharmaceuticals, health care, industrial organization, insurance, liability, and medical malpractice. She is also an associate Editor of the American Economic Review, the Journal of Health Economics, and the International Journal of Health Care Finance and Economics. The second book is Pharmaceutical Economics and Policy by Stuart O. Schweitzer. Schweitzer was a professor of health policy and management at the UCLA Fielding School of Public Health. Both books go through the economic and societal impacts of different price policies on pharmaceuticals using economic analysis and data. They also use data from pharmaceutical companies to determine where revenue is going from such high prices. 

To help me focus my research, I have a few questions to guide myself when finding sources: 

  1. Does the source use data to create a claim?
  2. Is the author from a legitimate institution?
  3. Does the information relate to and further my research?