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Your discussion assignment this week will involve some thought on the controversial area of pharmaceutical pricing

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Your discussion assignment this week will involve some thought on the controversial area of pharmaceutical pricing. Please, leave your politics behind on this assignment - I only want to hear from health economists here. As you have heard in the media and in the lesson this week, pharmaceutical companies have exhibited markups for their products that rival what I did with the $50 aspirin in hospitals back in the 80s. Many politicians and consumer advocates have argued that the Federal government should either regulate pharmaceutical prices or at least negotiate prices for the Medicare Part D program.

I would like for you to examine the idea of negotiating prices for pharmaceuticals under the Medicare Part D program. Currently Federal law prohibits the Centers for Medicare and Medicaid Services from negotiating with pharmaceutical manufacturers for lower prices. Should that change? Or, is it better left the way things are now?

Specifically, provide your ideas on the following questions:

• One argument in favor of negotiating prices;
• One argument opposed to negotiating prices;
• Project the impact on pharmaceutical companies if prices are negotiated - will fewer new drugs come to market, will research go overseas, or something else?
• Project the impact on markets overall if we retain the status quo with drug pricing. Again, no politics. Only economic arguments in your responses.