The economics of prescription drugs

Prescription drugs currently account for well under 20 percent of the health-care budget. Within a generation or two, they will undoubtedly account for most of it—which will be another good thing.  Pharma’s biochemical cures always end up far cheaper than the people-centered services they ultimately displace. Moreover, while much hands-on care only drags things out or soothes, the best medicines really cure. It is true that, early on in the pharmacological assault on a grave disease, drugs also stretch things out and can fail to beat the disease, so we often end up buying more drug and more doctor, too. But eventually drugs improve to the point where they beat the disease and thus lay off both doctor and hospital.

The Commentary article is excellent, the pointer is from Craig Newmark.