Health Care Cost

Governments around the world are struggling to cope with the rising cost of health care, and of drugs in particular (see chart). Many rich countries have resorted to price controls, and some on the American left advocate them noisily. But drug firms maintain that America, where they are free to price patented pills largely as they please, is the engine of global pharmaceutical innovation, while price-controlling Europeans are free riders. That, says PhRMA, the industry’s lobby based in Washington, DC, is because price regulations seen in other rich countries “chill innovation, impede patients’ access to the newest cutting-edge medicines, and trigger innovators to relocate to countries with more progressive public policy.”