Americans pay far more for prescription drugs than anyone in the world. This is because the drug companies, most of whom have their headquarters here, have persuaded enough members of Congress to accept their argument that the enormous implicit subsidy is the price that has to be paid for innovation. Is the argument accurate?
No. Most of the innovations we are paying for with artificially inflated prices are incremental advances on existing drugs that make little or no difference in the big picture. We could use the Covid drugs as a template and offer huge bonuses for new drugs that actually matter, while paying actual market prices for the others. Wouldn’t that make more sense?