Pharmaceutical Pricing Practices, Utilization and Costs - Meeting Summary. 7. Research Questions: Pricing Practices in the Pharmaceutical Market


Conference participants suggested that the following questions might be addressed as part of a research agenda in the area of pricing practices in the pharmaceutical market:

  • How do the prices and changes in the prices of U.S. pharmaceutical products compare to external benchmarks (e.g., overall inflation in the economy, overall inflation in health care, prices in other countries)?
  • How competitive is the U.S. pharmaceutical market, considering it therapeutic class by therapeutic class? Are drug manufacturers making monopoly profits?
  • What is the relationship between pharmaceutical companies' R&D costs and the prices of brand-name prescription drug products?
  • What are the advantages and disadvantages of requiring that prescription drug manufacturers make their R&D costs more transparent?
  • To what extent does the move to new, more expensive prescription drugs in different therapeutic classes represent value to society? Would the money be better spent if it were used to broaden access to prescription drugs?
  • What can be done to encourage greater price competition between brand-name pharmaceutical products, generic products, and OTC products within specific therapeutic classes?
  • What information might help improve the performance of the U.S. pharmaceutical market? Should the prices paid for prescription drugs (including rebates from drug manufacturers) by different purchasers and at various points along the distribution chain be made more transparent?
  • How can information that might improve the U.S. pharmaceutical market's performance be developed and conveyed?
  • What are the implications of the Medicaid best price?
  • What, if anything, should be done to increase physicians' and insured patients' sensitivity to the prices of prescription drugs? What is the effect of three-tiered patient cost-sharing arrangements on prescription drug utilization and costs?
  • How affordable are prescription drugs for Medicare beneficiaries with fixed incomes, uninsured children, disabled people with high needs and limited resources, etc.? Will making the pharmaceutical market more competitive make prescription drugs affordable for such individuals? If not, what, if anything, should be done?
  • What is the relationship between third-party reimbursement levels and profitability and innovation in the prescription drug industry?
  • What effects would the enactment of a Medicare prescription drug benefit that gives the Federal Government power over the prices of prescription drugs have on drug manufacturers' earnings, profitability, and ability to innovate?