The price of progress: prescription drugs in the health care market.

Pharmacy costs are rising in excess of general and medical cost inflation, leading to calls for price and utilization controls by public and private payers. Such controls would be ineffective and counterproductive because they would attempt to reverse two profound, historic phenomena at work in the U. S. health care system. The added costs associated with breakthrough medicines represent a major structural shift from the provision of traditional medical services to the consumption of medical products; they also represent the creation of economic, social, and public health utility that we value as a society. The balkanization of medical delivery, institutionalized under traditional reimbursement strategies and galvanized by federal law, does not adequately account for or efficiently accommodate this rotation and increased utility. Federal and state laws regulating health insurance and provider risk sharing need to be revamped to encourage rather than constrain the social progress embodied in expensive, breakthrough medical technologies.