Partnered Evidence-Based Policy Resource Center Director Austin Frakt in a recent article published on the New York Times offers a look at some of the pros and cons of potential strategies to reduce drug pricing in the U.S.
For example, Frakt writes, private insurers that drive “the hardest bargain” in a competitive market should be able to bring down premiums and cost-sharing to attract more consumers and boost revenue.
However, Yale School of Management economist Fiona Mortan tells Frakt that “consumers turn out to be fairly bad at shopping and do not respond to price decreases.”
Aaron Kesselheim, an associate professor of medicine at Harvard Medical school, says a major downfall of Medicare’s drug benefit is its lack of a system for keeping prices down.
“Drug manufacturers with monopoly products can raise prices to whatever extent the market will bear,” Kesselheim said.