This new Institute for New Economic Thinking (INET) blog piece by AIRnet researchers William Lazonick and Öner Tulum explores the complex issue of drug pricing, particularly the ongoing negotiations between Medicare and pharmaceutical companies. In this blog piece based on their new INET working paper, “Setting Pharmaceutical Drug Prices: What the Medicare Negotiators Need to Know about Innovation and Financialization, Lazonick and Tulum argue that the market cannot set a fair price for prescription drugs due to the lack of incentive for pharmaceutical companies to lower prices and their focus on shareholder profits over research investment. Lazonick and Tulum provide Medicare with a perspective on “Collective and Cumulative Learning” in the context of the Inflation Reduction Act Negotiations. They propose that Medicare consider the role of public funding in research when negotiating drug prices.
Read the full article here: https://www.ineteconomics.org/perspectives/blog/what-is-a-fair-drug-price
Access the full research paper here: https://www.ineteconomics.org/research/research-papers/setting-pharmaceutical-drug-prices-what-the-medicare-negotiators-need-to-know-about-innovation-and-financialization
