How should the government negotiate Medicare drug prices?

Consideration of investment costs, risks, and returns is central to the concept of a “fair price” that can be agreed upon by buyers and sellers. As such, the maximum fair price must be one that provides appropriate returns on both government and industry investment in drugs consistent with the scale and risk of these investments. These negotiations should recognize the co-creating roles of the public and private sectors in innovation and assure that the returns on public sector investments are comparable to those investments made by the private sector.