Health care costs in the U.S. are some 18 percent of GNP, nearly double what other rich countries spend. We read of drug therapies that cost $100,000 a year or more, and of drug price increases that are 6 times the rate of inflation, on average, and often much more when mergers reduce competition in the industry. Is this a major driver of excessive health care costs? Or is it a by-product of the huge costs of getting new drugs approved? Has big pharma delivered drugs that reduce the need for costly surgeries, which extend life and improve its quality? Or do they deserve the blame that has been leveled against them?
This debate is presented In Partnership with the Adam Smith Society, a project of the Manhattan Institute. The Adam Smith Society is a nationwide, chapter-based association of MBA students and business leaders who work to promote on campus debate and discussion about the moral, social, and economic benefits of capitalism. IQ2US health care debates are also generously supported by Thomas Campbell Jackson.
Presented in partnership with
For the motion
Oncologist, Bioethicist & Vice Provost, University of Pennsylvania
Ezekiel J. Emanuel is the Vice Provost for Global Initiatives, the Diane v.S. Levy and Robert M. Levy University Professor, and chair of the Department... Read More
President and CEO, Center for American Progress
Neera Tanden is the president and CEO of the Center for American Progress and the Center for American Progress Action Fund. Tanden has served in both... Read More
Against the motion
Executive VP for Policy, Research, and Membership, PhRMA
Lori M. Reilly is executive vice president for policy, research and membership at the Pharmaceutical Research and Manufacturers of America (PhRMA)... Read More
Director of Health Policy, Manhattan Institute
Paul Howard is a senior fellow at the Manhattan Institute, director of health policy, and a member of Project FDA, an MI initiative. He is a contributor... Read More
Where Do You Stand?
For The Motion
Medical patent laws created to spur innovation distort the drug market to allow large pharmaceutical companies a monopoly on life-saving treatments and the ability to exploit those in need for monetary gain.
Due to a lack of transparency around drug production costs and insurance subsidies for buyers, pharmaceutical companies are not beholden to traditional market forces like consumer-imposed price limits.
Pharmaceutical companies can charge exorbitant prices for common drugs, even when the actual cost of drug production and distribution are low.
Because most developed nations regulate medical costs and allow state negotiation with drug companies, patients in the United States pay substantially more for pharmaceuticals than do their counterparts around the world.
Against The Motion
Developing life-saving medication requires substantial time and resources; those costs are justifiably passed along to consumers when a drug is viable, and the sale of common drugs subsidizes the development of cures for rare diseases.
Given the financial interests of for-profit insurance companies, hospitals, and medical practices, pharmaceutical companies cannot be blamed for the economic burdens of an out-of-control health care system.
Pharmaceutical innovation eliminates the need for other costly medical interventions, such as organ transplants made obsolete by drug alternatives, and makes health care less expensive as a whole.
Because the American government allows a competitive free market for drugs and does not stifle innovation, the world benefits from American research and development of drugs.
Price control advocates argue that curtailing profits in the pharmaceutical industry would save the country money without reducing innovation. There is, however, no such thing as a free lunch. Bureaucratic price manipulation would only hurt the sickest patients.