Promoting Pharmaceutical Innovation While Controlling Health Care Costs

Health care policies should encourage the rapid development of innovative drugs that improve disease outcomes or cure disease, while avoiding high spending that does not reflect value. This project will describe how current pharmaceutical policies are addressing the challenge of innovation and cost, and will develop a framework for considering alternatives that might lead to higher-value pharmaceutical use and innovation. Ideal policies would provide strong financial incentives to support the development of valuable treatments, but would also prevent high prices that do not reflect value, and prevent utilization of more costly treatments when less costly but similarly effective options are available. Since it is difficult to develop actual policies that meet this ideal, this project will describe tradeoffs and promising directions for pharmaceutical policies that could enhance both valuable innovation and cost control.