PhRMA CHALLENGES GAO REPORT ON PRICE CONTROL

Following the release of the US General Accounting Office report on prescription drugs and spending controls in four European countries (Marketletter July 11), US Pharmaceutical Research and Manufacturers of America president Gerald Mossinghoff noted that the report shows that countries can keep the price of prescription drugs artificially low through government regulation and price controls, but that "reductions in drug prices lead to lower R&D expenditures."

Moreover, he said, many countries are finding that government regulation has unacceptably high costs, and these costs are causing them to explore ways to change their systems.

In the USA, on the other hand, powerful market forces are working on their own to bring down prescription drug price increases without creating the problems caused by government regulation. Mr Mossinghoff added that this is not the time to be experimenting with the heavy hand of government regulation.