Tuesday, December 07, 2004

Drug price controls cost lives--Manhattan Institute

Here is the new study by the Manhattan Institute examinining the Medicare prescription drug bill and the impact of price controls. The report concludes that,

The impact of price controls on Medicare drug purchases would be significantly greater in a much shorter period of time because they are deeper and because they would affect a larger segment of the pharmaceutical market and would send a negative signal to the hundreds of biotechnology firms that as yet have no revenues and that rely upon venture capital and pharmaceutical firm investment to sustain R&D activities. In fact, our prospective analyses, while necessarily more speculative than our retrospective analyses, suggest that applying current price controls to MMA purchases would reduce present value R&D spending by a further $372 billion, costing 277 million life years in the United States because of forgone discovery of new drugs.