In case you missed it, the Trump administration is moving forward with a plan to import into the United States dangerous government price setting for innovative cures and treatments. In a nutshell, the move will harm the scientists and researchers working around the clock to eradicate Covid-19, destroy the development of new medical breakthroughs, and delay patient access to lifesaving medicines. Here’s what you need to know:
- On Sunday, President Trump released an executive order aimed at unilaterally changing the way the Medicare program pays for both physician-administered medicines (under Part B) and drugs purchased by seniors at the pharmacy counter (under Part D).
- Full details of the so-called “Most Favored Nation” policy have yet to be released, but the president has made clear his intent to peg Medicare reimbursement for lifesaving therapies to the lowest cost paid in foreign countries with health systems that delay or deny patient access to the newest cures and treatments.
- The president is seeking to alter the Medicare program, which tens of millions of seniors rely upon, without congressional approval and with little input from patient advocates, medical innovators, and healthcare providers.
- The president’s new scheme goes farther than his initial plan to import foreign price controls last year. In fact, the new executive order appears even more extreme than Speaker Nancy Pelosi’s drug pricing plan (H.R. 3), which the president’s own economic advisers said would lead to 100 fewer drugs due to less investment in R&D.
The president’s plan will cut into future R&D budgets, disrupt the critical work undertaken by American scientists and researchers, and stifle investment in cutting-edge scientific innovation for Covid-19 therapies and other life-saving cures.
- Price fixing in OECD countries gutted global R&D spending by between $5 billion and $8 billion, enough to fund the discovery of three to four new drugs annually.
- Europe used to lead the world in biomedical innovation, until its governments began setting the price for prescription medicines.
- Today, more than half the world’s new medicines are byproducts of U.S. labs, and the same is true for more than half of the 728 unique compounds currently in development to fight Covid-19. By stifling the funding that’s needed to research, develop, and test new medicines, the president’s plan could all but guarantee that future cures die in the lab.
American seniors and patients will experience needless delays to accessing new medicines because of government price setting.
- Individuals in foreign countries with government price setting lack access to the latest medicines. Nearly 90 percent of new medicines launched over the last decade are available in the United States.
- In France, a developed nation with government price fixing, patients can access just 50 percent of new drugs. Patients in Switzerland and Canada are even worse off, with access to 48 and 46 percent, respectively.
Adopting foreign price controls is a wrong-headed approach, particularly as new data show the value of biopharmaceutical innovation. According to an analysis published in Health Affairs:
- The availability of new biopharmaceutical products has dramatically improved patient life-expectancy. Specifically, 52 and 60 percent of mortality gains from ischemic heart disease and cerebrovascular disease (respectively) over the last three decades can be attributed to pharmaceuticals. And new therapies are responsible for more than three quarters of mortality gains for HIV since 1990. We might never have achieved these gains if we had price controls in the United States.
With more patients enjoying the benefits of biomedical innovation – and as we race to eradicate a devastating pandemic – the president’s executive order is a major blow to American researchers, seniors, and patients writ large. As BIO’s Dr. Michelle McMurry-Heath noted:
“With scientists and researchers at America’s biopharmaceutical companies working around the clock to fight a deadly pandemic, it is simply dumbfounding that the Trump administration would move forward with its threat to import foreign price controls and the inevitable delays to innovation that will follow. This reckless scheme will eliminate hope for vulnerable seniors and other patients waiting for new treatments by drastically reducing investment in cutting-edge scientific research and development.”
You can learn more about the dangers of foreign price setting by reading BIO’s official position on the executive order here.