Health care in America has people living healthier and decades longer than those of a few generations ago, but advances in medicine have come at a heavy price to consumers. Public clamor over the costs of health care in the U.S. has targeted the pharmaceutical industry as a key factor behind the higher costs. The rapidly increasing price of prescription medicines has led many to ask whether the federal government should use price controls to keep the pharmaceutical industry from overcharging patients.

On One Hand...

The pharmaceutical industry has used its position in a strong economy to inflate prescription medication prices. Drug firms use lobbying and legal tactics to extend the duration of patents to avoid competition from generic drug producers. Production costs are cut by large federal tax credits and grants from the National Institutes of Health. The federal government should act to place controls on this inflated pricing system.

On the Other Hand...

The prices charged by pharmaceutical firms are warranted considering costs involved in researching, developing, testing, producing and marketing. Drug patents only allow companies a short period of time to recoup expenditures. Government interference or mandated price controls would harm both the industry and consumers by delaying drug production and pharmacological research.

• The cost of prescription drugs increased 6.1 percent in 1999.

• In 1999, the pharmaceutical industry allocated $24 billion to drug research and development.

• Between October 1998 and October 1999, $83 billion in pharmaceuticals were purchased in the U.S. (population 273 million), while Germany, France, Italy, United Kingdom and Spain combined (population 296 million) purchased $54 billion in pharmaceuticals.

• U.S. pharmaceutical sales increased 14 percent in 1999.

• The fixed period in which only the developer of a drug has the sole patent rights to produce and sell the product is 11 to 12 years on average.

• According to the U.S. Bureau of Labor Statistics, "the Producer Price Index for prescription pharmaceuticals increased 22.3 percent in the 12 months that ended in July 1998."

• It takes 12 to 15 years and the expenditure of $500 million on research and development for the average prescription drug to reach the consumer market.

Modern Healthcare, Pharmaceutical Research and Manufacturers of America, IMS Health Incorporated, U.S. Bureau of Labor Statistics, Alliance for Health Reform