DRUG PRICE CONTROLS

Abstract

The Manufacturers Association (PMA) has called for strong medicine to ease prescription drug prices in an effort to avoid the bitterest pill of all: mandatory government price controls. Under pressure from Congress and President Bill Clinton, PMA has proposed price-control mechanism that would voluntarily limit average annual drug price increases to the general rate of inflation. The industry initiative comes within weeks of Congressional Office of Technology Assessment report, Pharmaceutical R&D: Costs, Risks, and Rewards which suggests firms have priced their drugs 4.3% higher than necessary to recover R&D costs. Capitol Hill critics were generally unimpressed with the PMA proposal. A spokesman for Rep. Pete Stark (D.Calif.), who as chairman of the Ways & Means Committee's Subcommittee on Health advocates the establishment of drug price review board, says the PMA proposal does not change the Representative's opinion that drug prices are too high. PMA's proposal is a way for them ...