Clinical Trials – The impact of Price Control

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According to a research, most of the population in America favors the price control on prescription drugs but the good news is that there is long rich literature on this subject accompanied by disastrous consequences of price control. As applied to prescription drugs, several recent researches have shown that price control often leads to less drug researches, low amount of new prescriptions and reduced availability of the prescription drugs. And this is something that people will be less inclined to compromise with.

Reduced Drug Research and Development

It is a well known and recognized fact that medical and clinical trials are a task that needs to be carried out for months and years. A certain medicine, illness, disorder or any pharmaceutical product has to be examined for years and the patients, usually a group, have to be kept under surveillance and proper care for months. This means bigger expenses and thus, price control has a direct relationship with this factor. The more investment made to this sector, the better health and life of public gets.

The Loss of Future Drug Therapy

The impact of price control on clinical trials does not ends here. It might impact to a degree which the controls were set below the market prices. As per the recent study published by the National Bureau of Economic Research, 40 to 45% of the price cut in pharmaceutical prices can have a serious impact on the incentives of the private firms to invest into the stream o Research and Development. The study also estimates that under such price control situations, the number of compounds to be moved from laboratories to human trials will increase from 50 to 60 percent. Because of these uncertainties, a few portion of the compounds being moved to clinical trials can be directly translated into new products and its results will be fully felt for several decades due to longer development cycle. This further means reduced possibilities for new opportunities in the coming times. Thus, these effects would likely compound themselves over time.

Unnecessary Pain and Suffering

A research for the Manhattan Institute in regards to the recent study on drug pricing has estimated that in recent years when the Medicate Modernization Act was fully implemented, the government was paying and purchasing nearly 60% of the prescribed drugs in the United States. With a control over such a larger portion of the drug market, price control and negotiations would had serious consequences for the new drugs development. It was estimated that in certain years between 1960 and 2001, there were billion dollar less Research and Development made in drug therapies than otherwise due to various ways the government influenced the drugs prices. This loss translates into unnecessary pain and suffering for potentially millions of patients.

A Slowdown in Drug Availability

Not only the price control will lead to delayed development of drugs and medicines but also tends to eliminate the number of new drugs, or delaying the introduction of new drugs to the market. The more interference being made to the market in a given country, the longer it takes for the approved drugs to reach to the marketplace. It is also proven that “Greece, Belgium, and France, markets with considerable market intervention, have the longest delays between product approval and marketing, whereas Germany, Norway, the U.S., and the U.K., countries with relatively less intervention, have the fewest delays.”

Further the study continues that major part of delays is negotiation over prices. The time taken by the leaders to negotiation pricing was increasingly becoming the bottleneck in the launch of new medicines. While the government always tries to achieve lowest possible prices, companies always try to hold for prices they will accept and thus the population that would had benefited substantially from new treatment are left waiting. This can be easily dealt if there is less interventions being made in medical research.


The government has continues to intervene and dramatically increasing the activities in prescription market. Not surprisingly, the cost of the estimates for the prescription drugs will soar; some people are looking towards price regulations as a way to hold the expenses down. The use of the word “negotiate,” however, is misleading. It is, in fact, a process of government price fixing. If the government and population wants to have a beneficial and healthy medical research process being followed, it is better to define the terms and rules voluntarily rather than misleading or confusing the involved people.

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