Government commitment and regulation of prescription drugs

Abstract

Two papers in this volume review efforts worldwide to control the growth of drug spending and discuss the potential role for the U.S. government with respect to rationing of prescription drugs. I put the roles given to government in the two papers in context by focusing on the role of government as a partner with the pharmaceutical industry. I concentrate on the unique features of the prescription drug market, coupled with the fact that government is a payer, regulator, and provider in the health sector. I conclude that the federal government should exercise caution when attempting to regulate prescription drug prices.