Spending on pharmaceuticals is on the rise worldwide. And it well should be. Today, we are able to cure some diseases like hepatitis C that were virtual death sentences just a few years ago. This progress required significant investments by governments and private companies alike. Unquestionably, the world is better off for it.
Unfortunately, as President Trump pointed out in the State of the Union address, the United States has borne a significant amount of the negative effects associated with this development. For one, its regulatory apparatus has focused largely on drug safety, yet regulators have failed to emphasize cost-effectiveness when it comes to both new and existing drugs.
At the same time, the United States also pays significantly higher prices than the rest of the developed world when it comes to prescription drugs, due primarily to limited competition among drug companies.