We find that during the last 20 years, profits and sales by research-based pharmaceutical companies made up 1.0% and 7.5% of total health care spending, respectively. In addition, annual sales growth contributed – 4.5% to the annual growth in total health care spending, partly due to real declines in drug spending in some years when there were increases in real health care spending. We thereafter summarize the evidence base on the impact of biopharmaceutical innovation on overall health care spending, which has been addressed by a large literature on so called cost offsets of new drugs. We find that these studies report an average cost offset from medical innovation, or total cost decrease, of $151.94 per new drug. We estimate how much recently proposed US price controls on drugs in the US would raise health care spending and find that total health care spending would increase by $50.8 billion over a 20-year period.
Category: News and Events
Landmark Alzheimer’s Study May be Bogus
A landmark study published in 2006 implied amyloid beta in the brains of Alzheimer’s patients could be the cause of their disease. However, a new investigation is casting doubt on data used in the 2006 study.
In a lengthy investigation published in the journal Science, a researcher has expressed concerns that a prominent 2006 Alzheimer’s disease study may have falsified images.
Biden Breaks his Promise
David Henderson via IPI on the Inflation Reduction Act:
The Joint Committee on Taxation (JCT) has done its job, estimating the increase in taxes for people in each income group.
People with income between $75,000 to $100,000 will see their average tax rate rise from 15.8 percent to 16.0 percent. The average tax rate for people with income between $100,000 and $200,000 will rise from 19.1 percent to 19.4 percent, and between $200,000 and $500,000 will rise from 24.1 percent to 24.4 percent.
President Biden is eager to sign this bill, assuming it passes. So much for his campaign promise not to increase taxes on people making under $400,000.