16 October 2018 - A central theme in economics is that people who benefit the most from a good or service should pay more for it.

If a government decides to build a highway connecting 2 cities, charging a toll to users of the highway is preferred to financing the road through general taxation.

I think of the highway toll example in considering the pharmaceutical industry. The federal government provides many services that disproportionately benefit pharmaceutical firms. Most of these services are paid for by the public at large, through income and other taxes. In effect, we charge everyone for benefits realised by a few. Far more efficient would be to follow the highway example and charge pharmaceutical companies for the services they disproportionately receive. In this piece, I outline and propose user fees for 3 specific public policies.

Read JAMA Forum article