In recent years, health care reform has been a driving force in the American political system. If you watch the news, you will inevitably hear how citizens, government or the economy are or could be affected by some sort of change in medical regulations. One such hot topic is the cost of prescription drugs. All major pharmaceutical markets except the United States regulate drug prices in one way or another (Abbott and Vernon). The failure of the United States to do so is widely believed to expose consumers to exploitation by big pharmaceutical companies. Others believe that drug price regulations limit investment, innovation and competition in the pharmaceutical industry. In many ways both views are correct, but the latter may have a longer shelf life. Before a drug can be marketed, it must go through several stages of research and development (Abbott and Vernon). Starting with exploratory research, preclinical animal testing, three phases of human clinical trials and finally FDA (Food and Drug Administration) approval (Abbott and Vernon). Out of several thousand drugs, only a few will make it to the FDA approval stage (Abbott and Vernon). Testing is a highly regulated, time-consuming and expensive process. From start to finish, the process can take fifteen years and less than one in five compounds will reach the market where success is still not guaranteed (Abbott and private companies, with a low success rate, invest millions in several products. When a drug actually makes it to market, it is also a market and successful companies must make up for the money spent on development as well as the cost of drugs that did not make it to market. Once all investments are taken care of, there is still a need for profit. Some worry If the United States government implements controls on the cost of prescription drugs, private companies will be less motivated to invest in them. the development of pharmaceutical products, for fear of not recouping their investment This would provide pharmaceutical companies with less funds for the research and development process. According to information collected by Abbott and Vernon, a drop in the price of pharmaceutical products would result in a significant loss in research and development investment (Abbott and Vernon). If drug costs were to fall by 40 to 45 percent, the amount of medicine moving from animal testing to human clinics would decrease by 50 to 60 percent (Abbott and Vernon). With such high risks and low rewards, pharmaceutical companies will likely stop or slow down research into new technologies and compounds. In 1969, Canada imposed regulations on drug prices (Weidenbaum). After the regulation was imposed, the creation of new drugs decreased (Weidenbaum). This change in the pharmaceutical sector