A bill before the US Congress calls on health authorities to investigate whether expensive new drugs offer value for money, by comparing their risks and benefits with other treatments and older drugs.

Two members of the US House of Representatives, Jo Ann Emerson (Republican, Missouri) and Tom Allen (Democrat, Maine), are sponsoring a bill that would require federal funding for the evaluation of the cost effectiveness of new drugs

Credit: AP PHOTO/JOSE GOITA

Credit: AP PHOTO/PAT WELLENBACH

Currently new drugs are approved on the basis of their superiority over a placebo, with no requirement to show an advantage over existing treatments or cheaper generic pills.

If passed, the new legislation would see US taxpayers spending $75m (£47m; €67m) in 2004 to fund studies of the cost effectiveness of the nation's most expensive classes of drugs–something done routinely in other countries but a move that is bitterly opposed by the drug industry in the United States.

Annual spending on prescription drugs is rising by almost 20% a year in the United States, where it is now in excess of $150bn. The cost of drugs is one of the fastest growing components of overall healthcare costs, which are also rapidly rising and becoming …