ISSUE: How can we ensure access to new technologies for today’s patients while stimulating innovation for tomorrow’s patients? This panel will debate a variety of conventional and novel approaches to assessing and allocating new health technologies in the US. Dr. Goldman will moderate the discussion, represent the health policy perspective, and provide an overview of the pressing policy issues. Dr. Philipson will provide an innovator’s point of view, and Dr. Ollendorf will provide the health technology evaluation perspective. OVERVIEW: Medical innovation has generated significant gains in health in recent decades, but these advances have been accompanied by rapid growth in healthcare spending. Faced with a growing number of high-cost but high-impact innovations, some propose measures to constrain prices for new therapies—including global caps on pharmaceutical spending. This session will review the merits and pitfalls of such approaches. Those arguing for such caps often argue that prescription drugs are the only major category of health spending in which producers can exert relatively unrestrained market power, and the manufacturers benefit because Medicare and Medicaid programs limit the private insurers' ability to negotiate. They also question the value of new therapeutic advances, arguing that prices are too high for drugs with minimal health improvements. On the other side, opponents of such price caps argue that budget caps treat healthcare spending as a consumable good, when it actually should be viewed as an investment, whose benefits accrue over many years. Global budget caps arbitrarily anchor spending on the status quo and set too stringent a threshold for innovation. Budget caps, they argue, would have prevented the rapid diffusion of treatments -- like antiretroviral therapy and statins -- that have resulted in tremendous social benefits. This session will review these arguments and suggest ways to bridge the gap between the two positions.