Fairness in the trade-off between drug price regulation and investments in research and development: A survey of economists

Abstract

One of the most important policy issues in pharmaceuticals is the tradeoff between innovation and access. High drug prices promote additional research and development while hampering access. We used the behavioral economics theory of dual-entitlement to design a survey of economists who are members of the National Bureau of Economic Research to investigate the role of fairness in the prescription United States drug market. Sixty-two percent of respondents expected that price regulation would have a large or moderate impact on research and development by pharmaceutical manufacturers. The survey respondents reported manufacturers should be compensated for the upfront investments and risks they take in the drug development process. However, they also believed that prices were impeding access, especially for low-income patients, and making it more difficult for federal state and local governments to control drug spending. Taken together, these responses represent the tension between pricing, innovation and access.