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Cover for Fourth Quarter 2017 issue

March 9, 2018

Richmond Fed’s Econ Focus Magazine Looks at Prescription Drug Costs

The new issue of the Richmond Fed’s Econ Focus magazine looks at spending on prescription drugs. Americans spend a lot on prescription drugs relative to other countries — does that mean we pay too much? Some observers contend that high drug prices reflect the riskiness of new drug development. Some also say that U.S. consumers are shouldering the cost of research that benefits patients worldwide. Other observers, however, dispute that U.S. drug prices are explained by high research spending. The recent introduction of costly treatments for Hepatitis C, cancer and other illnesses, along with major price increases for some existing treatments, has brought new attention to this debate.

Also in this issue:

  • Speeding up payments. In the United States, payments move more slowly than in much of the rest of the developed world. While American consumers can choose from an increasing number of innovative platforms, actual payment processing still relies on older, slower technologies. In 2017, the Faster Payments Task Force, a collaboration between the Fed Reserve System and the private sector, presented options to modernize the U.S. payment system.
  • BMW’s apprentices in South Carolina. A four-year college degree might not be for everyone. And many firms today encounter difficulty finding and retaining skilled workers. BMW, which has been building cars in Spartanburg, South Carolina, since the 1990s, has been getting attention for its extensive training programs in coordination with community colleges.
  • Following in the family footsteps. Children entering a parent’s career are common in many fields — such as farming, medicine, real estate and sports, to name a few. When children enter a parent’s profession, they probably aren’t doing it blindly; they may have smart economic reasons.
  • Economic rise and decline of Petersburg, Virginia — and a path to recovery? Once an economically prominent city, Petersburg has since become best known for its urban decline and severe fiscal problems. The intensity of these problems may have come from a combination of being “too close” to the more prosperous city of Richmond and an inability of Petersburg to shrink its borders and adjust its urban infrastructure. But residential-based development that exploits the beauty of the city’s historic setting could be promising.
  • Interview. Nobel Prize winner Jean Tirole discusses the economics of online platforms for buying and selling, the need for regulators to be humble, and the future of jobs in an age of robots and artificial intelligence.
  • More. Coverage of other economic issues affecting the Fifth Federal Reserve District and the nation.

For a free subscription to Econ Focus or for copies of the magazine, call (800) 322-0565 or subscribe online. The articles also are available online.


As part of our nation’s central bank, the Richmond Fed is one of 12 regional Reserve Banks working together with the Board of Governors to support a healthy economy and deliver on our mission to foster economic stability and strength. We connect with community and business leaders across the Fifth Federal Reserve District—including the Carolinas, District of Columbia, Maryland, Virginia, and most of West Virginia—to monitor economic conditions, address issues facing our communities, and share this information with monetary and financial policymakers. We also work with banks to ensure they are operating safely and soundly, supply financial institutions with currency that’s fit for distribution, and provide a safe and efficient way to transfer funds through our nation’s payments system.

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