If Trump wants to lower drug prices, his obvious free-riding targets are outside the US
FOX NEWS
President Donald Trump just secured nine new pricing agreements with drug manufacturers that could help reduce what Americans pay for many prescription medicines.
The deals demonstrate Trump's commitment to lowering drug prices for patients. The president's dedication – and his desire to negotiate with companies individually, rather than imposing broad mandates – is commendable. But his efforts would be better directed at the root cause of high drug prices: foreign countries free-riding on American drug innovation.
To deliver lasting price reductions while protecting U.S. leadership in biomedical innovation, the Trump administration must focus its negotiating strategy overseas – and intensify its push to make other countries pay their fair share for the medicines America develops.
For decades, wealthy foreign governments have used price controls, mandatory rebates, reimbursement delays and other policies to suppress what they pay for innovative medicines. These measures allow foreign countries to reap the benefits of new treatments while forcing Americans to bear a disproportionate share of the cost of developing them.
American patients currently account for roughly three-quarters of pharmaceutical profits and over half of global research and development spending – far more than America's share of the world economy.
If U.S. leaders want to correct this imbalance, putting more pressure on drugmakers isn't the solution. Instead, the administration must focus on getting other countries to end their free-riding practices.
Forcing U.S. prices lower without increasing foreign countries' contributions risks harming both American patients and our broader biotech industry. Some members of Congress, for example, have proposed writing "most-favored-nation" drug pricing into law – permanently tying U.S. drug prices to the artificially low prices paid abroad.
Such an approach would effectively import foreign price controls into America – reducing funding for future research and development and slowing the development of new treatments. It could also threaten jobs, undermine manufacturing investment and weaken U.S. drugmakers' ability to compete with China.
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