The essential question: What structural incentives would single pricing create?

One answer: Much of pharma’s institutional advertising might be redirected to influencing the few hundred honchos who have to sign off on the One Price. Ditto for the AARP’s influence effort.

Another point: How would differential pricing for drugs in the same class be determined? (Derek Lowe recently mentioned that one of the me-too statins caused an entirely-unexpected improvement in CRP.) The safety/efficacy battle would become a political battle in D.C. Sounds like a bad idea to me. (The me-too drugs already have multiple purposes anyway. Absent price fixing collusion, they drive the cost down to what the market will bear. They also give another chance to people who cannot tolerate one drug.)

Re. DTC advertising: I’m all for it. Otherwise it is difficult to get the word out on important new drugs. Take the non-sedating antihistamines. Without advertising, a lot of people would have continued to self-treat with the sedating kind, with major impact on quality of life, job and school performance, and safety while operating machinery. As another example, I bet a lot of people who have given up on their diabetic neuropathy will give it another try once the Cymbalta advertising hits.

How big of a problem is it anway with the people who insist on some drug they have seen on TV? I understand it must be incredibly annoying for the poor doctor, but what is the actual economic cost? How many people would you have to “treat” by detoxifying them from advertising to prevent one adverse outcome?

My understanding is that the usual result of a regulation forcing a standard price on a product that started with a variety of prices is that everyone ends up paying a price near the high end of the original range. This has been observed with gasoline prices, for example. I’m not an economics expert and I have not spend any time trying to think through the specific conditions of pharmeceuticals.

Perhaps owing to lack of clarity in rcentor’s description, I detect some misunderstandings about his proposal. If I read you correctly, your single pricing proposal is NOT a call for bureaucratically fixed pricing (which would involve a process of evaluations and negotiations subject to lobbying efforts from drug companies or interest groups like AARP) but instead simply a requirement that drugs be sold at a single price to everyone. The drug companies could decide where to set that single price, but would be restricted from offering discounts to anyone (except, I would hope and expect, to participants in need-based give-away programs like most companies already have). The resulting pricing clarity would introduce competition because any pricing descrepancies between drugs in the same class or with similar functions would have to be justified in terms of measurably increased efficacy or more favorable side effect profiles.