The new Secretary of Health and Human Services, Alex Azar, has identified his priorities. At the top of his list is lowering prescription drug prices. Prescription drugs constitute only 11% of U.S. health expenditures, according to the CDC and CMS—and, compared with other developed nations, U.S. drug spending ranks in the bottom one-third. But prices continue to increase rapidly here, with a year-on-year rise of almost 10% for drug list prices, according to a 2017 Credit Suisse report. Controlling drug prices through government action, though, is fraught with peril. Drugs are the most significant reason why humanity has made such gains against chronic and life-ending diseases over the past half century. Policies aimed at reducing drug costs must not restrict their supply, jeopardize their quality, or inhibit the essential drug innovation necessary for tomorrow's cures.
American patients in particular have benefitted more than others from drugs. For decades, the United States has been the country where new drugs have been made first available. Four times as many life-saving cancer drugs were first made available in the United States compared to countries like Germany, Japan, Switzerland, France, Canada, Italy, and the UK, as reported in the Annals of Oncology in 2007. Similarly, 29 of the 45 novel drugs approved by the FDA in 2015 were approved in the United States first. Most recently, a 2017 study of 45 FDA-approved new cancer drugs found that all of them were covered by Medicare in the United States, while only 26 were approved and covered in the UK, 19 in France, 13 in Canada, and only 11 in Australia.
