The Role of the Government in Pharmaceutical Pricing Essay Sample

Pharmaceutical companies frequently charge monetary values that are much higher than the cost of production of medical specialties. even the life salvaging sort. The net income earned by a pharmaceutical company is calculated by deducting the cost of production from the monetary value multiplied by measure sold ( “Price Controls. ” 2007 ) . The fact that the net income border of the pharmaceutical companies is frequently excessively high is a cause of concern particularly for those who can non afford equal wellness attention. Ethical motives demand of the wellness attention and the pharmaceutical industries to take down their monetary values so as to do wellness attention. including medical specialties. easy available to all ( Rosen. 2007 ) .

At the same clip. the Congress has experienced that the wellness attention and pharmaceutical industries should non be forced to take down their monetary values via monetary value controls that have been introduced in many foreign markets for pharmaceuticals. The ground why the United States would non present monetary value controls to look into pharmaceutical monetary values is that the net incomes earned by the pharmaceutical concerns help in research and development – of the kernel in this industry ( “Pharmaceutical Price. ” 2003 ) .

Yet. the Congress contains the power to take down the monetary values of pharmaceuticals by using a different method wholly. Price controls have the possible to decelerate down growing in the pharmaceutical industry. But. subsidies on pharmaceuticals will non decelerate down research and development in the industry.

As a affair of fact. subsidies for pharmaceutical companies may really good be targeted for research and development. Price controls may be introduced to complement the subsidies. nevertheless. With monetary value caps that would non allow the monetary values of medical specialties to increase beyond control. particularly the life salvaging medical specialties ; and subsidies to assist the pharmaceutical industry in go oning its advanced work to profit society at big ; the authorities would happen itself in an first-class place to care for the wellness of all Americans.


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Pharmaceutical Price Controls Abroad: An Unfair Trade Policy. ( 2003. November 6 ) . Retrieved

23 May 2007. from hypertext transfer protocol: //rpc. senate. gov/_files/hc110603. pdf.

Rosen. Leah J. ( 2007 ) . Are Pharmaceutical Monetary values Merely? A Discussion of Business. Values. and

Ethical motives.Pharmalicensing. Retrieved 23 May 2007. from hypertext transfer protocol: //pharmalicensing. com/articles/disp/1080562872_406814b87105d.

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