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Lower drug prices can improve innovation

An often made claim is that high drug prices are necessary for innovation. We qualify this claim: drug prices can be too high, namely when the price exceeds the value of the drug to society. Such prices lead to excessive investment in some projects at the expense of other valuable research projects. We propose a benchmark for identifying these cases in practice and we discuss how competition law can be applied in this area.


Lower drug prices can improve innovation (PDF - 475.21 KB)