The trade off between lower prices and availability of new drugs

What is it about?

Drug regulation is necessary to protect consumers, but affects drug availability and innovation. Price regulation make drugs affordable, but it may also reduce access. In this paper we review and discuss the impact of pricing rules on the expenditure and availability of new drugs and show which systems create a more important trade off between price and availability. We also discuss the effects of pricing system on drug personalisation.

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Photo by Colin Davis on Unsplash

Photo by Colin Davis on Unsplash

Why is it important?

The advent of personalised medicine has made the trade off between prices and availabilty crucial and it has opened the debate on the incentives to invest in drug personalisation. Uncertainty in this market is already quite high, so regulation should not add to it. Investments in drugs are crucial to improve health and it is then necessary to set clear rules for price setting.