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Reds under our meds

Economist Original article ›

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The Economist quotes experts saying that drug innovations would not be affected by price controls on drugs. Pricing reforms can accomplish the reverse, spur innovation by doing as Britain and Germany are doing- pioneering comparitive reviews of drugs effectiveness and cost-benefit analyses aimed at reimbursing firms for new drugs based on their performance. Sanford Bernstein, a financial advisory firm, says in its study that a 20% reduction in what Medicare pays for drugs would not kill off innovation, it would reduce earnings per share of big pharma firms by 3-8%. As drug research is now done in many countries, and its a globalized industry, innovation is not likely to be automatically affected by price reductions in one country like the USA, according to Alna Garber of Stanford University and Patricia Danzon of Wharton Business School.

Medical clinics at drugstores and retail locations offer convenience and lower price to meet a growing need.

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In some locations over a third of patients at these clinics ar the uninsured. About 1 in 10 are affiliated with hospitals . Even the Cleveland Clinic and the Mayo Clinic are joining this trend, and Mayo Clinic doctors think the primary care physicians offices can learn from this and help this trend.

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