“Instead of doubling price controls, Republicans should take seriously the structural … more
In a desperate offer to claim fiscal discipline without touching rights, President Donald J. Trump is Push Congress Republicans adopt a “more favored nation” drug pricing model (MFN) for Medicaid. This policy will link Medicaid’s returns to the lowest prices paid to other developed countries – government officials dictate drug prices under threat of coercion, seizure of patents or market exclusion.
Let’s be clear: MFN is the price determination. Is not a market reform. It is not a tough deal of tactics. Republicans who fall for this plan abandon any free market pretexts.
Medicaid does not need price controls from other countries. It already imposes them here. According to the existing “Best Price” rule, manufacturers must offer Medicaid the lowest price they give to any other buyer, as well as abrupt, compulsory discounts. The result? Medicaid receives average discounts exceeds 50%.
For many medicines, manufacturers have already been forced to sell with loss – what is called a “negative price”. This means that the government not only takes the medicine, but also requires cash payment to do so. The MFN would make this problem exponentially worse with Medicaid’s anchorage in markets where prices are dictated by the bureaucratic Fiat.
In practice, this could force companies to stop offering their drugs to Medicaid entirely. And thanks to the federal law, exit from Medicaid also means the loss of Medicare Part B. Therefore, an act of economic illiteracy will at the same time sabotage both Medicaid and Medicare.
MFN supporters want to frame politics as a way to stop the “foreign freeloading”. But there is nothing difficult or strategic for adopting failed Europe’s or Canada prices.
International reference pricing is not a neutral benchmark. Countries such as France and the United Kingdom do not “negotiate” prices – dictate them. When manufacturers are denying, they are locked by the market entirely and risk theft of patents through compulsory licensing. In Germany, the price of a drug has been set after one year Based on whether a government council considers it “more effective” than existing choices – a bureaucratic exercise so incorrect that it regularly rejects FDA medicines that doctors consider pioneering.
Introduction of foreign prices is not a smart budget tactic. It is delivered to blackmail.
MFN supporters want to polish its long -term effects. But we don’t have to think – data data already shows what price checks do in innovation.
It costs over $ 2.6 billion to develop a new drug mainly because the failure rate is shocking. less than 8 to 100 drugs that introduce clinical trials that ever reach patients. Even more than two in three new drugs are growing in the United States Because our system still allows innovative to gain performance of successful products.
This motivation structure is exactly what MFN will destroy.
Congress’s budget office has noted that “the amount of money that drug companies devote to R&D is determined by the amount of revenue they expect to earn from a new drug”. With the reduction of expected yields, MFN will restore research and development budgets – which means fewer new treatments and treatments and more deaths that can be prevented.
The MFN will also deepen the dysfunction of the 340B program – an unnecessary deformation of the drug market that has been stunned beyond its initial mission and inflates the costs for employers and taxpayers.
Prices 340B are connected to the types of Medicaid discounts. Cut Medicaid Prices via MFN and 340B discounts are automatically expanded. This means that hospitals and clinics involved in the program – most of which resell these reduced drugs to private insurers in mass units – repeat even greater desperate.
Instead of doubling price controls, Republicans should take the Medicaid structural reform seriously.
Rep. Chip Roy, R-Texas and 19 by his colleagues they describe Proper approach: Restore fiscal responsibility to Medicaid through block grants or maximum funds, enhance the verification of eligibility and align the motivation with the results. Without a serious reform, Medicaid’s current trajectory will require huge tax increases and benefits across the boat.
This is the choice. It is either real reform now – or fiscal collapse and distribution later.
The MFN proposal is not difficult for foreign freeloaders. It is soft in mathematics, hostile to innovation and blind for the reality of drug development. It would make Medicaid more expensive, less effective and more dangerous – not only for patients, but for the future of American medicine.
The real solution is not to copy other countries’ failures. Is to lead with the beginning and the reform.
