{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2026,7,3]],"date-time":"2026-07-03T02:07:34Z","timestamp":1783044454362,"version":"3.54.6"},"reference-count":22,"publisher":"National Academy of Sciences","issue":"9","license":[{"start":{"date-parts":[[2025,2,25]],"date-time":"2025-02-25T00:00:00Z","timestamp":1740441600000},"content-version":"vor","delay-in-days":0,"URL":"https:\/\/creativecommons.org\/licenses\/by-nc-nd\/4.0\/"}],"content-domain":{"domain":["www.pnas.org"],"crossmark-restriction":true},"short-container-title":["Proc. Natl. Acad. Sci. U.S.A."],"published-print":{"date-parts":[[2025,3,4]]},"abstract":"<jats:p>Current proposals aimed at reducing U.S. pharmaceutical prices would have immediate benefits (particularly for low-income and elderly populations), but could dramatically reduce firms\u2019 investment in potentially highly welfare-improving Research and Development (R&amp;D). The United States subsidizes the worldwide pharmaceutical market: U.S. drug prices are more than 250% of those in other Organization for Economic Co-operation and Development (OECD) countries. If each drug had a single international price across the highest-income OECD countries and total pharmaceutical firm profits were held fixed: U.S. prices would fall by half; every other country\u2019s prices would increase (by 28 to over 300%); and R&amp;D incentives would be maintained. We propose a potential lever for the U.S. government to influence worldwide drug pricing: access to the Medicare market.<\/jats:p>","DOI":"10.1073\/pnas.2418540122","type":"journal-article","created":{"date-parts":[[2025,2,25]],"date-time":"2025-02-25T13:42:51Z","timestamp":1740490971000},"update-policy":"https:\/\/doi.org\/10.1073\/pnas.cm10313","source":"Crossref","is-referenced-by-count":7,"title":["Policy options for the drug pricing conundrum"],"prefix":"10.1073","volume":"122","author":[{"given":"Kate","family":"Ho","sequence":"first","affiliation":[{"name":"Department of Economics","place":["Princeton"]},{"name":"Princeton University and National Bureau for Economic Research","place":["Princeton"]}],"role":[{"vocabulary":"crossref","role":"author"}]},{"given":"Ariel","family":"Pakes","sequence":"additional","affiliation":[{"name":"Department of Economics","place":["Cambridge"]},{"name":"Harvard University and NBER","place":["Cambridge"]}],"role":[{"vocabulary":"crossref","role":"author"}]}],"member":"341","published-online":{"date-parts":[[2025,2,25]]},"reference":[{"key":"e_1_3_4_1_2","unstructured":"A. S. Mulcahy D. Schwam S. L. Lovejoy \u201cInternational prescription drug price comparisons estimates using 2022 data\u201d (Tech. Rep. RRA788-3 RAND Corporation 2024)."},{"key":"e_1_3_4_2_2","unstructured":"M. Seshamani \u201cMedicare drug price negotiation program: Draft guidance implementation of sections 1191\u20131198 of the social security act for initial price applicability year 2027 and manufacture effectuation of the maximum fair price (MFP) in 2026 and 2027\u201d (Center for Medicare 2024). https:\/\/www.cms.gov\/files\/document\/medicare-drug-price-negotiation-draft-guidance-ipay-2027-and-manufacturer-effectuation-mfp-2026-2027.pdf. Accessed 30 January 2025."},{"key":"e_1_3_4_3_2","unstructured":"M. Freed T. Neuman J. Cubanski \u201cFAQs on prescription drug importation\u201d (Kaiser Family Foundation 2024). https:\/\/www.kff.org\/health-costs\/issue-brief\/faqs-on-prescription-drug-importation\/."},{"key":"e_1_3_4_4_2","doi-asserted-by":"publisher","DOI":"10.4159\/9780674042605"},{"key":"e_1_3_4_5_2","unstructured":"FTC \u201cPharmacy benefit managers: The powerful middlemen inflating drug costs and squeezing main street pharmacies\u201d (Office of Policy and Planning Interim Staff Report 2024) https:\/\/www.ftc.gov\/system\/files\/ftc_gov\/pdf\/pharmacy-benefit-managers-staff-report.pdf. Accessed 30 January 2025."},{"key":"e_1_3_4_6_2","doi-asserted-by":"publisher","DOI":"10.1377\/hlthaff.2020.00284"},{"key":"e_1_3_4_7_2","doi-asserted-by":"publisher","DOI":"10.1056\/NEJMp1405158"},{"key":"e_1_3_4_8_2","doi-asserted-by":"crossref","unstructured":"M. Chernew D. M. Cutler K. Ghosh M. B. Landrum \u201cUnderstanding the improvement in disability-free life expectancy in the US elderly population\u201d in NBER Chapters Insights in the Economics of Aging D. A. Wise Ed. (National Bureau of Economic Research Inc. 2016) pp. 161\u2013201.","DOI":"10.3386\/w22306"},{"key":"e_1_3_4_9_2","doi-asserted-by":"crossref","unstructured":"J. De Loecker C. Syverson \u201cAn industrial organization perspective on productivity\u201d in Handbook of Industrial Organization K. Ho A. Hortacsu A. Lizzeri Eds. (Elsevier Amsterdam 2021) vol. 4 pp. 141\u2013223.","DOI":"10.1016\/bs.hesind.2021.11.003"},{"key":"e_1_3_4_10_2","doi-asserted-by":"crossref","unstructured":"E. G. Cleary M. J. Jackson E. W. Zhou F. D. Ledley Comparison of research spending on new drug approvals by the national institutes of health vs the pharmaceutical industry 2010\u20132019. JAMA Health Forum 4 e230511 (2023) https:\/\/doi.org\/10.1001\/jamahealthforum.2023.0511.","DOI":"10.1001\/jamahealthforum.2023.0511"},{"key":"e_1_3_4_11_2","unstructured":"M. Seshamani \u201cMedicare drug price negotiation program: Initial memorandum implementation of sections 1191\u20131198 of the social security act for initial price applicability year 2026 and solicitation of comments\u201d (Center for Medicare 2023). https:\/\/www.cms.gov\/files\/document\/medicare-drug-price-negotiation-program-initial-guidance.pdf. Accessed 30 January 2025."},{"key":"e_1_3_4_12_2","unstructured":"J. Biden Report on the State of the Union Delivered to a Joint Session of Congress on March 7 2024 (US Government Publishing Office 2024) Congressional Record Volume 170 Issue 41 pp. S2272-2277."},{"key":"e_1_3_4_13_2","unstructured":"C. P. Adams \"CBO Simulation Model of New Drug Development\" (Congressional Budget Office Working Paper 2021-09 2021). https:\/\/www.cbo.gov\/publication\/57010. Accessed 30 January 2025."},{"key":"e_1_3_4_14_2","doi-asserted-by":"crossref","unstructured":"J. Gatwood et al. Price elasticity and medication use: Cost sharing across multiple clinical conditions. J. Manag. Care Spec. Pharm. 20 1102\u20131107 (2014) https:\/\/doi.org\/10.18553\/jmcp.2014.20.11.1102.","DOI":"10.18553\/jmcp.2014.20.11.1102"},{"key":"e_1_3_4_15_2","doi-asserted-by":"crossref","unstructured":"S. Van Alsten J. Harris Cost-related nonadherence and mortality in patients with chronic disease: A multiyear investigation national health interview survey 2000\u20132014. Prev. Chronic Dis. 17 200244 (2020) http:\/\/dx.doi.org\/10.5888\/pcd17.200244.","DOI":"10.5888\/pcd17.200244"},{"key":"e_1_3_4_16_2","doi-asserted-by":"crossref","unstructured":"OECD Health at a Glance 2021: OECD Indicators (OECD Publishing Paris 2021). https:\/\/doi.org\/10.1787\/ae3016b9-en.","DOI":"10.1787\/ae3016b9-en"},{"key":"e_1_3_4_17_2","unstructured":"B. W. Setser \u201cCross-Border Rx: Pharmaceutical Manufacturers and U.S. International Tax Policy \u201d prepared statement before the Committee on Finance United States Senate 1st Session 118th Congress. Council of Foreign Relations May 11 2023."},{"key":"e_1_3_4_18_2","doi-asserted-by":"crossref","unstructured":"P. Danzon Differential pricing of pharmaceuticals: Theory evidence and emerging issues. PharmacoEconomics 36 1395\u20131405 (2018) https:\/\/doi.org\/10.1007\/s40273-018-0696-4.","DOI":"10.1007\/s40273-018-0696-4"},{"key":"e_1_3_4_19_2","unstructured":"L. Amand-Eeckhout \u201cRevision of EU pharmaceutical legislation\u201d (European Parliamentary Members\u2019 Research Service PE 749.789 2024) https:\/\/www.europarl.europa.eu\/RegData\/etudes\/BRIE\/2023\/749789\/EPRS_BRI(2023)749789_EN.pdf. Accessed 30 January 2025."},{"key":"e_1_3_4_20_2","unstructured":"D. Popp \u201cPharmaceutical package: Extracts from adopted ENVI reports\u201d (European Parliament Press Release 19-03-2024 2024). https:\/\/www.europarl.europa.eu\/news\/en\/press-room\/20240318IPR19418\/pharmaceutical-package-extracts-from-adopted-envi-reports. Accessed 30 January 2025."},{"key":"e_1_3_4_21_2","doi-asserted-by":"crossref","unstructured":"P. Dubois A. Gandhi S. Vasserman Bargaining and international reference pricing in the pharmaceutical industry. (National Bureau for Economic Research Working Paper 30053 2022). https:\/\/www.nber.org\/papers\/w30053. Accessed 30 January 2025.","DOI":"10.3386\/w30053"},{"key":"e_1_3_4_22_2","unstructured":"L. Amand-Eeckhout \u201cRevision of the EU\u2019s basic pharmaceutical legislation including medicines for children and for rare diseases\u201d (European Parliament Legislative Train 05.2024 2024). https:\/\/www.europarl.europa.eu\/RegData\/etudes\/BRIE\/2023\/747440\/EPRS_BRI(2023)747440_EN.pdf. Accessed 30 January 2025."}],"container-title":["Proceedings of the National Academy of Sciences"],"original-title":[],"language":"en","link":[{"URL":"https:\/\/pnas.org\/doi\/pdf\/10.1073\/pnas.2418540122","content-type":"unspecified","content-version":"vor","intended-application":"similarity-checking"}],"deposited":{"date-parts":[[2025,2,25]],"date-time":"2025-02-25T13:44:31Z","timestamp":1740491071000},"score":1,"resource":{"primary":{"URL":"https:\/\/pnas.org\/doi\/10.1073\/pnas.2418540122"}},"subtitle":[],"short-title":[],"issued":{"date-parts":[[2025,2,25]]},"references-count":22,"journal-issue":{"issue":"9","published-print":{"date-parts":[[2025,3,4]]}},"alternative-id":["10.1073\/pnas.2418540122"],"URL":"https:\/\/doi.org\/10.1073\/pnas.2418540122","relation":{},"ISSN":["0027-8424","1091-6490"],"issn-type":[{"value":"0027-8424","type":"print"},{"value":"1091-6490","type":"electronic"}],"subject":[],"published":{"date-parts":[[2025,2,25]]},"assertion":[{"value":"2024-09-11","order":0,"name":"received","label":"Received","group":{"name":"publication_history","label":"Publication History"}},{"value":"2025-01-13","order":2,"name":"accepted","label":"Accepted","group":{"name":"publication_history","label":"Publication History"}},{"value":"2025-02-25","order":3,"name":"published","label":"Published","group":{"name":"publication_history","label":"Publication History"}}],"article-number":"e2418540122"}}