The Need for Greater Price Transparency in the Medical Device Industry: An Economic Analysis

Abstract

Proposed legislation seeks to impose price transparency in the health care industry as a remedy for increasing medical device prices. This paper analyzes previous attempts to mandate similar price-disclosure rules in a variety of industries. We identify the economic conditions under which mandatory price disclosure is likely to generate substantial benefits and costs. Applying these conditions, we conclude that mandatory price disclosure for implantable devices is unlikely to pass a benefit-cost test.