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NE Journal of Medicine Backs Drug Price Controls

Tue, 06/27/2000 - 11:00pm — Karen Stevenson
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In an editorial, the prestigious New England Journal of Medicine (NEJM) takes on the question of price controls for the pharmaceutical industry. They point out, "An industry whose profits outstrip not only those of every other industry in the United States, but often its own research and development costs, simply cannot be considered very risky." The editorial points out that drug companies benefit from extensive research conducted by the government's National Institutes of Health, receive tax benefits on all their own research and development costs, and then obtain government-sponsored 17-year monopolies on the products they bring to market. For these and other reasons, the editors suggest it is not too much to expect that there be some constraints on the profits drug companies can make from these products, and that drug companies have an intrinsic obligation to the public, as well as to their shareholders.

In an editorial, the prestigious New England Journal of Medicine (NEJM) takes on the question of price controls for the pharmaceutical industry. They point out, "An industry whose profits outstrip not only those of every other industry in the United States, but often its own research and development costs, simply cannot be considered very risky." The editorial points out that drug companies benefit from extensive research conducted by the government's National Institutes of Health, receive tax benefits on all their own research and development costs, and then obtain government-sponsored 17-year monopolies on the products they bring to market. For these and other reasons, the editors suggest it is not too much to expect that there be some constraints on the profits drug companies can make from these products, and that drug companies have an intrinsic obligation to the public, as well as to their shareholders.