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Healthcare expenditures comprise over 17 % of the United States Growth Domestic Product, with a considerable and growing share attributable to pharmaceutical products. High and increasing prices, particularly those commanded by branded drugs, are a major driver of this growth and pose challenges to patients’ ability to afford or gain access to treatment. Reforms have been set forth in response to public outcry over these concerns; the proposed changes have in turn raised questions about potential implications for future innovation. To critically evaluate the potential effect of a policy change on the balance between affordability, access, and rewards for innovation in the United States requires an understanding of its current system of purchasing and reimbursement for drugs. This article examines the relationships and transactions across the pharmaceutical supply chain that shape the market, a number of which can place inflationary pressure on prices. It goes on to review the state of innovation under these conditions, and considers the potential of payment reform and other policy proposals to address pricing concerns among branded drugs.