Should the government regulate prescription drugs’ prices?

As the cost of prescription drugs has risen more than 50% in recent years, a debate emerged on whether the government should intervene to lower drug costs

Rise of the Issue

Over the past six years, the cost of prescription drugs have increased by more than 50%, and has led many Americans to ask for the government to intervene and lower these costs to make drugs more affordable for the average citizen. 

Division arises over whether it is the government’s place to interfere. Proponents say that the cost of drugs can be life or death for many Americans, and as such, the government must step in to help them. Opponents disagree and say the government should not interfere with the free markets because it would negatively impact research and development funding.

Issue Timeline


Medicaid Is Created

Under the Social Security Act of 1965, Medicaid is created to provide funding for medical and health services for those who cannot otherwise afford it.


Additional Payment Programs Are Added to Medicaid

The Medicaid Drug Rebate Program and Health Insurance Premium Payment Program are added to the Social Security Act.


The Affordable Care Act is Signed into Law

President Obama signs the Affordable Care Act to expand medicaid eligibility and provide access to health care, including an out-of-pocket limit for customer spending.


The Affordable Care Act Is Upheld Constitutional

In National Federation of Independent Business v. Sebelius, the Supreme Court upheld the Affordable Care Act as constitutional under the commerce clause.

Micro Issues


Free Markets

Proponents of regulated prices say that the free markets are the reason for the high prices of drugs, and that the government should step in to adjust the cost. Opponents say that the market appropriately adjusts to the supply and demand of different drugs.


Research and Development

Opponents to regulated prices say the incentive to create new drugs will be eliminated, or at least heavily weakened if prices for drugs are more strictly regulated. Those in favor of regulated prices argue that drugs will continue to be developed for humanitarian reasons.


Medicaid as a Model

Proponents of regulated prices say Medicaid is popular and successful because of the impact it has on those with less means. Opponents say the system is a failure, as evidenced by the reoccurring need to amend the law.

Pro Arguments


The cost of a drug can be a matter of life or death.

Individuals who cannot afford medical care and prescriptions have to face the impossible choice of either lending money to pay for their health treatments or forgo necessary care completely.


Companies have kept prices high to make a profit.

Companies, including the pharmaceutical industry, have a primary objective of making money for investors, and will therefore tend to raise prices as a result, unless the government intervenes.


Intellectual property law protects the interests of researchers and developers.

Research and development interests would be properly maintained while regulating prices because patents are still issued to protect the interest of those who create the drug.


Other countries have lower drug costs than the United States.

Countries, such as Canada and the United Kingdom, already have programs in place to regulate the cost of drugs. Pharmaceutical companies comply with these programs abroad while charging those in the United States more money for the same product.


The public is in favor of lowering drug costs.

For decades, polls have shown that Americans generally favor lowering drug costs, making this a sound policy decision for lawmakers.

Con Arguments


Research and development is hindered by regulating costs.

One of the purposes of researching and developing new drugs is the profit that can be made once the discovery is sold on the market. However, if the government sets the price, that incentive could decrease or altogether disappear.


Different options exist for the government to correct the cost of drugs without setting prices.

Other policies, such as requiring the disclosing of drug costs pre-treatment, are available for legislators that would not require the government stepping into the market and setting prices.


Government programs that address drug prices are costly.

Programs like Medicaid and Medicare come from the federal budget and have been known to be increasingly costly to taxpayers, with Medicaid spending growing to $671.2 billion billion in 2020, and Medicare spending rising to $829.5 billion.


Healthcare and drugs, though expensive, are more readily available than in many other countries.

Even though the cost of treatment can be high, people travel from across the globe to pay for treatment in the United States because of how good and readily available treatment is.


Regulation would not solve the pharmaceutical industry’s influence on drug prices.

As legislators are often supported by companies, organizations, and lobby groups, drug prices would still be greatly influenced by the pharmaceutical industry and its interests.