“The highest prices paid by Americans for drugs cover a disproportionate share of research and … more
Earlier this month, President Donald Trump signed What did he call “One of the most subsequent executive commands in our country’s history.”
The mandate is essentially an update of his “most favored nation” policy of his administration. It directs pharmaceutical companies to connect US drug prices to the lowest prices paid by other developed countries.
It definitely seems unfair that Americans pay more for drugs than foreigners. Thus, the president’s insistence that drug companies offer Americans the best agreement they provide worldwide has an intuitive appeal.
But the finances behind this proposal are much more complicated. The highest prices paid by Americans for drugs cover a disproportionate share of research and development efforts from which the total world benefits.
As we have become his chest worldwide. Drug prices here in other countries will give minimal savings for the United States and destroying the funding of biomedical research. In the long run, pharmaceutical companies will develop fewer new medicines to rescue life. And this will disappoint the Americans and the foreigners to unjustifiably.
Other countries pay less for medicinal products because their governments at violent prices. If drug companies want to sell their products within the country’s borders, they must agree with the price of the foreign government.
This strategy has compromises. For beginners, manufacturers prioritize markets where they can gather higher yields. So they tend to delay their drug starting in countries with price controls.
Throughout the G20 group of middle and upper income, simply 38% The new drugs that began between 2012 and 2021 were available from October 2022.
In the United States, 85% of these new drugs were available.
Even in the countries of our peers, foreign patients do not have access. Only 61% of these drugs were available in Germany, 59% in the United Kingdom, 45% in Canada and 34% in Australia.
A study found that European countries with their own publications of “more favored nation” policies are experiencing delays Up to one year For new medicines. Such launch delays Reduce life expectancy For patients in these countries.
Drug companies prioritize markets where they can charge higher prices – such as the United States – because drug development is dangerous and expensive. Gets about $ 2.6 billion And over a decade, on average, to bring a new medicine to the market. And about 90% Drug candidates fail to obtain approval.
The attractiveness of the US market to drug manufacturers has also led to significant benefits for our economy. The moment, two in three New medicines are developing in the United States.
Where will this drug survey go if the United States introduces external price controls with a “more favored nation” policy? It will probably go to China – if it does not disappear entirely.
Already, the prospect of drug research in the United States is increasing more gloomy. Prices specified in Medicare by law to reduce the inflation of Democratic 2022 are expected to lead to its development 139 fewer drugs By 2035.
This could include treatments for rare cancers or Alzheimer’s. But even if medicines that have not been developed will simply offer moderate improvements to chronic diseases, their sacrifice is still a very high price to pay for possible short -term price reductions.
And for these “reductions”. If Trump’s management successfully implements a more favored nation policy, drug companies are likely to respond by increasing prices in other countries – or pulling them out of the market there completely.
According to one 2022 study By researchers from UCLA, Stanford and the University of Toulouse, France, “reporting pricing causes a significant increase in prices charged to reference countries, but only a moderate decrease in US prices.”
The poorest countries are poorly equipped to handle higher prices. Thus, Americans can save figurative pennies – while foreigners lose access to life -saving medicines.
There are better ways to reduce drug prices in the United States.
Pharmacy benefit managers and other intermediaries claim about half From any dollar spent on prescription drugs in this country. Congress and administration can offset market abuses that increase prices for consumers.
The administration may also insist that other countries pay prices according to the value of new drugs as a prerequisite for impressive trade agreements with the United States. This would help to ensure that foreign countries will take a larger share of the Globe Research and Development tab.
The laws of the economy are stubborn things. If Trump’s administration really wants to do the best for patients in the United States and worldwide, they will abolish this most favored nations.
