Trump Administration’s Drug Pricing Plan Is Wrong for America

President Trump issued an executive order this Friday afternoon that will implement an international pricing index (IPI) model for Medicare Part B drugs and biologicals. This executive order purports to lower drug prices by linking the price paid through Medicare for drugs to prices in a number of foreign countries.

This model goes directly against President Trump’s promise in his most recent State of the Union Address, in which he said, “We will never let socialism destroy American healthcare.” Price controls are a staple of socialist health care systems around the world, and this model follows that blueprint. 

This executive order creates broad-stroke changes to supply chains for drug manufacturers, distributors, group purchasing organization, hospitals, physician clinics, and much more. As a result, many patients will be forced to live with the consequences of strict price controls, too.

IPI models in other countries have significantly restricted access to many necessary drugs. Of the 27 drugs the Trump administration itself has examined, only 41 percent were universally available in 16 comparison countries. Ninety-five percent of new cancer drugs are available in the United States; only 55 percent in the comparison countries. The average lag between the time cancer drugs are available in the U.S. compared to elsewhere is 17 months. 

This model will create suffering and unnecessary deaths through lack of access to lifesaving medicines. We have access to these medicines now, why would we want to change that?

The IPI model will also restrict the potential revenue from new drugs developed in the US by artificially prescribing prices. Investment into research and development is intrinsically tied to the future regulatory landscape. If drug manufacturers and innovators cannot recoup as much of their investment, then they will invest less in new and innovative drugs.

As a global leader in health care innovation, the United States is well-positioned to create solutions for the global pandemic. The IPI model will restrict innovation and make economic recovery more difficult.

Socialist price controls reduce innovation and force patients to go without crucial medicines. Tell President Trump to stick to his promises and rescind this executive order.