There is plenty of debate over whether the FDA should be looser or tougher with new drug approval, but I rarely hear the question posed as “approval at what price?”
One option would be to approve relatively strong and safe drugs at full Medicare and Medicaid reimbursement rates, if not higher. Drugs with lesser efficacy or higher risk could be approved at lower reimbursement prices. It is possible or perhaps even likely, of course, that private insurance companies would follow the government’s lead.
Dr. Peter Bach has promoted one version of this idea, and produced a calculator for valuing these drugs. In essence the government would be saying to lower quality producers “yes, you can continue to try to improve this drug, but not at public expense.”
I believe proposals of this kind deserve further attention, and in general the notion of regulatory approval need not be conceived in strictly binary, yes/no terms.