Trump urged to refocus drug pricing efforts
Trump urged to refocus drug pricing efforts
The Order reportedly aims to reduce drug prices “almost immediately, by 30% to 80%” via a ‘most favored nations’ policy that will mandate U.S. citizens pay the same price as the nation paying the lowest price.
The Global Innovation Policy Centre (GIPC) of the U.S. Chamber of Commerce is calling on President Donald Trump to reconsider his Executive Order on Most Favored Nation (MFN) pricing for U.S. medicines, which the GIPC reportedly said “would jeopardize the innovation that has made the United States a global leader in life sciences.”
In the latest blog post of the Chamber, the GIPC’s Senior Vice President, Global Innovation Policy Brad Watts and Chamber Vice President of Health Policy, Lexi Branson—while acknowledging the goal of reducing drug prices as a “worthy one”—outlined the risks of MFN pricing and called on the Administration to instead “focus on market-based solutions that lower costs while preserving the incentives that drive medical breakthroughs.”
The May Executive Order 142297 of Trump, titled “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients,” gave companies 60 days to extend MFN pricing to all Medicaid patients, for newly launched drugs, to return increased revenues from negotiations with countries to American patients, and to provide for direct purchasing options to patients at MFN rates.
The Order reportedly aims to reduce drug prices “almost immediately, by 30% to 80%” via a ‘most favored nations’ policy that will mandate U.S. citizens pay the same price as the nation paying the lowest price.
Hence, prices in other developed countries will rise “to equalize,” Trump said in a May social media post. Thus far, Pfizer and AstraZeneca have signed agreements on MFN pricing with the administration.
As per the GIPC post, MFN pricing would corrode the incentives the U.S. R&D ecosystem has to take on the leadership role in bringing biopharmaceutical innovation to market:
Reportedly, “President Trump has argued that the U.S. leads the charge in pharmaceutical innovation, funding much of the world’s progress in this field. MFN pricing would jeopardize this leadership, disincentivizing manufacturers from developing new drugs and taking us one step backward in the race to cure cancer and other deadly diseases.”
A post published by Vital Transformation on September 30 carried a report which claimed that the MFN policy would result in a loss of 1.98 to 2.2 million jobs (40% of U.S. biopharma industry jobs); a loss of $600 billion in federal tax revenue and $450 billion in state tax revenue; and a loss of up to $2.4 trillion in earnings generated by the biopharma sector, among other findings. MFN policies could reduce US life sciences R&D spending by 18.5% and cut clinical trial activity by up to 75%; it estimated. It was asked to conduct the analysis, Vital Transformation said but did not reveal by whom.
The blog post mentioned two other Chamber-produced reports namely the Patient Access Report and Research Deserts Report that it says combined with the Vital Transformation report, confirm that “price controls like MFN are a step in the wrong direction.”
MFN pricing would hurt US patients, making them subject to delayed access to medicines, the post further claimed. German patients wait an average of 133 days to access new treatments; in Spain, the delays can be up to 500 days; and in Canada, some patients move to the US rather than wait for new drugs; as per the GIPC.
Patient advocacy groups such as Patients for Affordable Drugs Now have defended Trump’s focus on lowering drug prices, but question how the MFN process will work in practice and have urged the administration to ensure pharmaceutical companies don’t simply raise drug prices overseas to make up for lost profits.
