Why Does Pharma Make Record Profits From Taxpayer-Funded Research? Does Pricing Regulation Really Impact Innovation?

Vaccines have been developed quickly and efficiently since the start of the COVID-19 pandemic, in part due to taxpayer-supported funding. The federal government negotiated special prices of $10 and $19.50 per dose, although a Pfizer executive expects a substantial price hike. Now, tension is building as pharma eyes potentially lucrative yearly booster shots, especially if the vaccine cost is raised to $175 per dose. Medicare negotiation and pricing legislation may be the answer.

“Americans should stop buying the pharmaceutical industry’s argument that innovation and new drug development will dry up if the government uses its purchasing power and bargains to get a better deal. The United States spends more per capita than any other wealthy nation for prescription drugs — often the same drugs available for far less overseas. And while taxpayer dollars play a key role in funding innovation, the pharmaceutical industry enjoys profits that are almost double the average of companies in the S&P 500. We can have lower prices as well as innovation.” Read more here.

(Source: David Mitchell, NY Times, 3/24/21)