Congress Should Not Impose Foreign Price Controls On Innovative Drugs

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Promoting more affordable drugs is not simple. It requires the hard work of understanding what is driving the problem and implementing policies that directly fix them. The MFN is a shortcut that patients will quickly come to regret.

Simple and neat solutions are alluring but often wrong. A case in point is President Trump’s proposal to adopt a most favored nation (MFN) policy. The MFN sets Medicaid’s price for a drug at the lowest price charged in other developed countries each of which has price controls on drugs. If implemented, this policy will make a bad situation much worse.

The logic for implementing the MFN is simple – if patients in the U.K. or Canada are paying less money for a drug, then so should patients in the U.S. But the prices for innovative drugs in many OECD countries are only lower because these nations impose strict price controls, which always come with a high cost.

Read the entire op-ed here.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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