He obtained his undergraduate degree in mathematics at Uppsala University. He received his M.A.and Ph.D. in economics from the Wharton School at the University of Pennsylvania. He has been a visiting faculty member at Yale University and a visiting senior fellow at the World Bank.

Philipson has served in the second Bush Administration as the senior economic advisor to the head of the Food and Drug Administration and subsequently as the senior economic advisor to the head of the Centers for Medicare and Medicaid Services. He served as a health care advisor to Senator John McCain during his campaign for President of the United States. He was appointed by the Speaker of the U.S. House of Representatives to the Key Indicator Commission created by the Affordable Care Act. He has served as a scientific advisor to Congress on the 21st Century Cures legislation and on the steering committee of Vice President Biden's Cancer Moon Shot Initiative.

Philipson has twice been the recipient of the highest honor of his field: the Kenneth Arrow Award of the International Health Economics Association (for best paper in the field of health economics). In addition, he was awarded the Garfield Award by Research America, The Prêmio Haralambos Simeonidisand from the Brazilian Economic Association, and the Distinguished Economic Research Award from the Milken Institute. Philipson has been awarded numerous grants and awards from both public and private agencies, including the National Institutes of Health, National Science Foundation, Rockefeller Foundation, Alfred P. Sloan Foundation, John M. Olin Foundation, and Royal Swedish Academy of Sciences.

He is a founding editor of the journal Forums for Health Economics & Policy and has been on the editorial board of Health Economics and The European Journal of Health Economics. His research has been published widely in all leading academic journals of economics, such as the American Economic Review, Journal of Political Economy, Quarterly Journal of Economics, Journal of Economic Theory, Journal of Health Economics, Health Affairs, and Econometrica.

Philipson is a fellow, board member, or associate of a number of the National Bureau of Economic Research, American Enterprise Institute, Manhattan Institute (where he was chairman of Project FDA), Heartland Institute, Milken Institute, RAND Corporation, and USC Shaeffer Center for Health Economics and Policy. At the University of Chicago, he is affiliated with the John M. Olin Program of Law & Economics, George J. Stigler Center for the Study of the Economy and the State, Population Research Center, and NORC. He has served on the University-wide Council on Research and on the Advisory Committee to the University's Office of Intellectual Property and Technology Transfer.

Philipson has done executive consulting for many Fortune 100 companies as well as government organizations domestically and internationally. This has included work for the President's Council on Science and Technology, National Academy of Sciences, and UK National Health Service. It has also included work for multi-lateral organizations such as the World Bank, World Intellectual Property Organization, and OECD. In 2007 he co-founded Precision Heath Economics LLC, which was sold in 2015 to Precision for Medicine Group LLC.

Philipson’s research is frequently disseminated through the popular press. He is a monthly op-ed contributor for Forbes and frequently appears in such media outlets as CNN, CBS, FOX News, Bloomberg TV, National Public Radio, New York Times, Wall Street Journal, Businessweek, The Economist, Washington Post, Investor's Business Daily, and USA Today.