Trio triumph with their prescription to crack American medicine’s cost conundrum

Three sixth-formers won first place in an international economics competition with their exploration of why some life-saving medicines in the US can cost more than a car – and what should be done about that.

Keshav Aggarwal, Yash Mehta and Jasmaan Sahota, who entered Year 13 this month, took the top spot in the Youth Economics Initiative’s (YEI) EconOlympiad.

As a result, they received YEI’s backing to enter the International Economics Olympiad – an élite competition which requires an organisational endorsement for each team taking part.

Headmaster Neil Enright said: “My congratulations go to Keshav, Yash and Jasmaan on this impressive achievement. Their entry not only represents a great deal of hard work, but is also an excellent example of the free-thinking scholarship we seek to nurture here at QE.”

Yash said: “US drug pricing is one of the clearest examples of economics directly affecting people’s lives. Behind every graph, market failure, patent, and policy debate are patients who may be forced to choose between financial stability and essential medication. That made this challenge especially meaningful for me.”

The QE team, Veblen Goods*, and 52 other teams entering from around the world spent ten weeks researching a complex real-world economic issue and delivering a ten-minute policy presentation. Entrants were challenged to act as policy advisers to the US Department of Health and Human Services, developing innovative solutions to address the growing crisis of soaring prescription drug prices.

The QE boys’ ten-minute presentation video proposed a balanced policy package. They examined structural challenges within the American pharmaceutical market, including patent monopolies, information asymmetry and the influence of Pharmacy Benefit Managers (PBMs). The team argued that while drug price caps may improve affordability in the short term, they risk significant adverse long-term consequences, including medicine shortages and substantial reductions in investment in early-stage medical research and development.

Instead, they proposed a sophisticated three-stage policy framework designed to reduce costs while preserving incentives for pharmaceutical innovation:

• Short term: expand Medicare price negotiations using existing legislation;
• Medium term: increase competition through reforms that encourage the production and uptake of generic medicines;
• Long term: introduce government patent buyouts with immediate generic licensing, based on the economic framework developed by Nobel Prize-winning economist Michael Kremer. This approach, they said, would eliminate monopoly power while fairly compensating pharmaceutical companies, ensuring continued investment in the development of new medicines.

You can see the team’s winning pitch here. 

 * Named after American economist Thorstein Veblen, a Veblen good is a type of luxury item for which demand increases as the price rises, which contradicts the typical relationship between price and demand.