Unit 2 → Subtopic 2.7
Should the Government Regulate Drug Prices?
Prescription drug prices have become a major economic and ethical issue in many countries, especially in places where pharmaceutical companies have market power to set high prices. While some argue that government intervention is necessary to make essential medicines affordable, others believe that allowing free-market pricing encourages innovation and investment in new treatments. This project challenges students to engage in an in-class debate on whether the government should regulate drug prices, applying economic theories of market intervention, supply and demand, and price elasticity.
Students will be divided into two teams. One side will argue in favor of government price controls, emphasizing how high drug prices limit access for low-income patients and create consumer surplus inefficiencies. They should research case studies where countries with regulated drug prices (such as Canada or the UK) have lower costs and better health outcomes. They should also explore how pharmaceutical companies may inflate prices due to patents, monopolistic behavior, and lack of competition.
The opposing side will argue against government price regulation, stating that allowing pharmaceutical companies to set their own prices creates incentives for research and development, leading to life-saving medical advancements. They should investigate how price controls could lead to drug shortages, reduced investment in research, and longer approval processes. They should also examine alternative solutions to affordability issues, such as government subsidies, public insurance policies, or generic drug expansion instead of direct price regulation.
During the debate, students must present data-driven arguments, challenge opposing claims, and engage in discussion on how government intervention can help or hinder innovation and accessibility in healthcare markets. The debate will conclude with a class reflection on whether price regulation is necessary, harmful, or if a middle-ground approach would be best.
The goal of this project is for students to understand the economic trade-offs of government intervention, learning how pricing strategies, competition, and public policy affect healthcare affordability and market efficiency.
Recommended Procedure:
Research the Economic and Ethical Debate on Drug Pricing – Investigate why some countries regulate drug prices while others allow market-based pricing.
Develop Arguments for Both Sides – The government regulation side should emphasize affordability and access, while the free-market side should highlight innovation incentives.
Analyze Real-World Examples and Data – Study case studies of regulated vs. unregulated pharmaceutical markets and compare price differences, innovation rates, and health outcomes.
Prepare for the Debate and Anticipate Counterarguments – Use economic principles and real-world evidence to support claims and refute opposing arguments.
Conduct the Debate and Reflect on Economic Trade-offs – Engage in structured discussion, then evaluate whether government price controls, market-based pricing, or a hybrid approach would be most effective.
Suggested Sources:
Understanding Government Intervention in Drug Pricing:
Investopedia: How Drug Pricing Works – https://www.investopedia.com
Khan Academy: Government Regulation in Markets – https://www.khanacademy.org
2. Case Studies on Regulated vs. Market-Based Drug Pricing:
Harvard Business Review: The Impact of Drug Price Controls – https://hbr.org
The New York Times: Why Prescription Drugs Cost Less in Canada – https://www.nytimes.com
3. Pharmaceutical Market Competition and Innovation:
McKinsey & Co.: How Drug Pricing Affects Innovation – https://www.mckinsey.com
World Health Organization: Policies for Affordable Medicines – https://www.who.int
4. Debate Preparation and Argument Development:
Harvard Debate Council: Constructing Strong Economic Arguments – https://www.harvard.edu
Purdue OWL: How to Build an Effective Debate Strategy – https://owl.purdue.edu
Grading Rubric:
Total Points: __ /20
