Points to consider about prescription drug prices: an overview of federal policy and pricing studies.

Pharmaceutical prices in the United States are under evaluation as policy makers decide how to reduce health care expenditures and public subsidy of the pharmaceutical industry. Furthermore, evidence of higher drug prices in the United States, compared with those in other countries, fuels the prescription drug price debate. These issues are not new to the public forum and much can be learned from prior debates and policies. This paper begins by reviewing the pricing debate with the Kefauver hearings on monopolies held during the late 1950s and early 1960s and continues with the current price debate. Government reports and academic studies are discussed, addressing the methodological differences and their implications to policy makers. Finally, the literature review includes foreign government prescription drug programs with their respective prescription drug expenditures. Evidence provided by academics about the pricing practices of the drug manufacturers indicates product quality and price information would force firms to compete on the price level, thus reducing pharmaceutical product pricing to the "true" market price.