Imagine if, while president, Barack Obama signed an executive order implementing socialist price controls on prescription drugs. And suppose that decision limited the drugs available to patients, dried up funding for innovative new treatments and, ultimately, resulted in the unnecessary deaths of thousands of Americans a year.
Republicans would’ve been furious. Conservatives would’ve done everything within their power to run him out of the White House. Tea Party members would’ve marched in the streets.
But President Obama didn’t concoct such a dangerous, irresponsible, un-American executive order.
President Trump did.
Trump recently introduced four new executive orders. One reduces the cost of insulin and EpiPens for a very small number of low-income patients. Another order allows for the importation of certain drugs. A third eliminates kickbacks to middlemen who negotiate drug prices. The final executive order is a catastrophically irresponsible scheme that threatens to destroy Americans’ access to drugs and prevent the development of life-saving new medicines.
The executive order uses communist-style government price controls to bind the cost of some prescription drugs to the price of medicines in countries with socialist health care systems.
Trump’s heart may be in the right place – the executive order is intended to lower the price of drugs for patients and taxpayers. But, in this case, the medicine is far worse than the cure.
Countries that use the socialist price caps Trump plans to emulate are all plagued with a serious failing that unnecessarily risks the health and lives of its citizens: Groundbreaking new drugs are often not available to patients.
For example, Americans have access to 100 percent of all new respiratory drugs brought to market from 2011 to 2018. Just 64 percent of those same respiratory prescriptions are available in Italy. The French can obtain only 55 percent of the medicines, while residents of Ireland, Portugal, and Greece can each access a paltry 36 percent of the drugs.
The problem isn’t limited to respiratory drugs.
Twelve of the 13 cardiovascular drugs introduced between 2011 and 2018 are available in the United States, while Canadians can get their hands on just three of the medicines. Ninety-five percent of new oncology meds are available in America, while just 74 percent of the same drugs are available in the UK. Only 58 percent of oncology prescriptions made their way to Canada, 49 percent are available in Japan, and Greeks have access to a measly 8 percent of the treatments.
Worse still, labs are closing and medical researchers are fleeing from countries that apply socialist price controls to prescriptions.
How Congress Can (And Can’t) Lower Drug Prices
The number of new drugs originating from the UK, France, and Germany has fallen by more than half over the past 40 years. That’s because there is no economic incentive for drugmakers to invest resources in countries where they often can’t come close to recouping the nearly $3 billion price tag associated with bringing a typical new drug to market. As a result, America has become the primary producer of innovative, life-saving new treatments – and will likely be the country responsible for developing a COVID-19 vaccine.
If Trump has his way and the U.S. adopts socialist price controls, research funding for new drugs will dry up. As a result, many Americans who would’ve been treated by state-of-the-art cures will instead needlessly suffer and die.
It is true that patients in countries like Canada, France, Germany, Italy, Greece, and the UK often pay less for their prescriptions. One reason is massive taxpayer subsidies that artificially lower the price of medicines, masking their true cost. The other reason is that countries are ripping off America by not paying their fair share of the astronomical cost of developing innovative new medicines.
Fortunately, there’s a 30-day comment period before the new executive order takes effect. During that time, President Trump should put his famous negotiating skills to work and make countries pay their fair share of pharmaceutical costs.
Trump should appoint a special negotiator in the U.S. Trade Representative’s office to work out a more reasonable deal between America and countries that benefit from our pharmaceutical industry. The negotiator should demand that nations exploiting American drug research help share the cost – or face economic consequences.
Republicans who believe in free-market principles must do their part, as well.
President Trump should not be allowed to get away with using Bernie Sanders-style socialist tactics to try to combat high drug prices. It is vital that Republicans hold Trump’s feet to the fire and demand that he shelve the executive order before it undermines free-market values, endangers the health of millions of Americans, and kills medical innovations that could save countless lives.
Drew Johnson is a public policy analyst and government watchdog who serves as a senior fellow at the National Center for Public Policy Research.
Join the conversation as a VIP Member