Health reform is currently the predominant health policy issue in the US. It carries profound implications for the pharmaceutical field, including the possibility of price controls that could stifle pharmaceutical research. While policy makers are contemplating alternative approaches to reform, the marketplace for pharmaceuticals has changed dramatically. For example, price increases have lessened, price discounting has increased, and new drugs are typically launched at prices lower than those of the leading product in the therapeutic class. These change in the industry is the number of job reductions announced and the decline in market valuation of pharmaceutical companies. Policy makers need to take the changed marketplace into consideration as they proceed with health reform, to avoid layering additional policy impediments on top of an increasingly harsh and unforgiving market. Such an approach could seriously compromise incentives for pharmaceutical research.