ITIF Report: Global Drug Price Controls Restrict Pharmaceutical Research and Development

July 18, 2023

The Information Technology and Innovation Foundation (ITIF) study reports that drug price controls in non-US Organization for Economic Cooperation and Development (OECD) nations inhibit biopharmaceutical R&D by over $56 billion annually, foregoing the creation of around 25 new drugs yearly. If countries paid an amount in alignment with U.S. prices instead of imposing price controls, this would lead to a $254 billion increase in pharmaceutical revenues, $56.4 billion of which could be directed to research and development. According to the ITIF, if Japan, Italy, Germany, France, and the UK were to lift their price controls, the world could benefit from 12 additional new drugs each year.

The study suggests that such controls reduce the development of pioneer drugs for diseases such as heart disease and cancer. In response, two forward paths have been proposed: either countries could continue with price controls, which could expand to other nations and subsequently limit the development of new drugs, or nations exploiting these controls could be encouraged to contribute more to global health. The second option entails that wealthy nations, including those beyond the United States, financially support their fair share of pharmaceutical innovation.

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[Source: thepharmaletter, July 18th, 2023]

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