Can the US cut drug prices without sacrificing new cures?

Congress’s ambitious plans to expand health coverage are crashing up against one of the great questions in health policy: Can they force the pharmaceutical industry to hold down prescription drug prices without sacrificing the medical innovation that could lead to new treatments and cures in the future?

Democrats’ Build Back Better reconciliation bill sets a hard cap on the price Medicare would pay for some prescription drugs, ensuring that the program would pay no more than 20 percent more than other wealthy nations. Those prices would also be available to the commercial plans that cover...