Foreign Free Riders and the High Price of U.S. Medicines

BMJ 2005; 331; 958-960

4 Pages Posted: 18 May 2013

See all articles by Donald W. Light

Donald W. Light

Rowan University School of Osteopathic Medicine ; Center for Migration and Development; Institute for Advanced Study

Joel Lexchin

York University

Date Written: Oct 22, 2005

Abstract

The United States government is running a campaign to characterize other industrialized countries as free riding on high U.S. pharmaceutical prices and innovation in new drugs. The campaign is based on the argument that lower prices imposed by price controls in these countries do not pay for research and development costs. Companies allege that Americans have to pay the research costs through higher prices in order to keep supplying the world with new drugs. We can find no evidence to support these and related claims, and we present evidence to the contrary. We also explain why the claims themselves contradict the economic nature of the pharmaceutical industry.

Keywords: health economics, pharmaceutical prices, affordable drugs

Suggested Citation

Light, Donald W. and Lexchin, Joel, Foreign Free Riders and the High Price of U.S. Medicines (Oct 22, 2005). BMJ 2005; 331; 958-960. Available at SSRN: https://ssrn.com/abstract=2266664

Donald W. Light (Contact Author)

Rowan University School of Osteopathic Medicine ( email )

Cherry Hill, NJ 08003
United States
6092160071 (Phone)

Center for Migration and Development ( email )

200 Wallace Hall
Princeton, NJ 08544
United States
6092160071 (Phone)

Institute for Advanced Study ( email )

1 Einstein Drive
Princeton, NJ 08540
United States
(609) 734-8000 (Phone)

Joel Lexchin

York University ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada
+416-736-2100 x 22119 (Phone)
+416-736-5227 (Fax)

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