President Trump issued four executive orders Friday that he said will lower drug prices — but in reality, three of the orders will cause far more harm than good and represent electioneering at its worst.
The three harmful executive orders allow the importation of drugs from Canada, reduce the price of insulin, and introduce an International Pricing Index for prescription drugs.
The International Pricing Index will effectively impose price controls on prescription drugs under Medicare Part B — and in so doing, dramatically slow medical progress. That will be disastrous for the health of current and future patients.
TRUMP’S FOUR EXECUTIVE ORDERS TO LOWER DRUG PRICES: WHAT TO KNOW
The International Pricing Index is the worst offender in the three executive orders. The index links the prices the U.S. government pays for prescription drugs to the lower prices Britain, France, Canada and other developed nations pay for the same drugs.
Governments in these countries forcibly cap drug prices. By tying U.S. drug prices to those overseas, President Trump is effectively importing other countries’ price controls. Those price controls will deprive pharmaceutical researchers of the revenue needed to fund cutting-edge development of new drugs that could improve and in some cases save the lives of millions of patients.
Almost two-thirds of all new drugs are produced in the U.S. But innovation doesn’t come easy.
It takes more than a decade and $2.6 billion, on average, to bring a drug from the lab to market. What’s more, less than 12 percent of treatments that start clinical trials are ever approved by the U.S. Food and Drug Administration.
For drug companies and their backers to continue funding research and development, they need some level of assurance that their high-risk investments could pay off.
President Trump’s executive orders render such assurance impossible. Price controls could reduce drug companies’ revenue by as much as $1 trillion over a decade. As a result, up to 15 fewer new drugs could make it to market over that period, according to an analysis from the Congressional Budget Office.
The coronavirus pandemic has demonstrated that we need more medical innovation to develop safe and effective vaccines — anti-viral treatments and drugs such as remdesivir, which is showing promise as a treatment for patients with COVID-19.
But Trump’s International Pricing Index will result in less medical innovation. It will prioritize a short-term decrease in drug prices in the months leading up to the November election over the long-term health of the American public.
The only good idea among the president’s executive orders will eliminate the rebates from drug companies that go to pharmacy benefit managers — the middlemen who negotiate with drug companies on behalf of insurers. These rebates enrich the middlemen by boosting drug prices for patients at the pharmacy. Eliminating the rebates will save patients money.
What else can the president…