Deregulation Is the Only Cure for High Drug Prices

By Raymond J. March. He is a Research Fellow at the Independent Institute and Assistant Professor of Agribusiness and Applied Economics at North Dakota State University. Excerpt:

"According to the RegData database, the pharmaceutical and medical manufacturing industry had approximately 10,000 more restrictions than the median U.S. industry as of 2014. These regulations come at a tremendous cost. A producer will have spent between $50 million and $840 million to prepare a drug for FDA approval and an average of $1 billion during the approval process.

Even with the FDA’s lavish patent system, most drugs do not earn their producers profits. A white paper published by the Biotechnology Innovation Organization finds only 20 percent of FDA approved drugs cover their R&D and approval costs. Thus, even if political pressure to lower drug prices worked, many drugs would not be produced at all. It is difficult to see how making prescription drugs unavailable helps patients.

To lower drug prices, we need less regulation. The FDA’s influence in the prescription drug market remains the largest obstacle to deregulation. Policy efforts to lower drug prices which do not address the FDA are treating symptoms instead of the disease. And patients need relief quickly!"