A new White House study says foreign countries have underpriced prescription drugs to the detriment of patients and innovation—but this is an argument against policies being proposed by the very same White House. What does this mean for drug price controls?
The study: Last week, the White House Council of Economic Advisers released Funding the Global Benefits to Biopharmaceutical Innovation, which finds foreign governments are taking advantage of biopharmaceutical research being done in the United States, The Wall Street Journal reports.
What’s happened: The underpricing of medicines in other countries has resulted in “a slower pace of overall innovation, less competition from new entrants, and thus higher prices paid for patented drugs that lack therapeutic competition,” says the study.
And worse: “Although foreign drug manufacturers also suffer from underpricing, the cost is borne disproportionately by the U.S. because it funds roughly half of all global medical research, invests 75% of global medical venture capital and accounts for 70% of patented pharmaceutical profits,” explains The Wall Street Journal.
Hey, we agree. “The difference between U.S. and foreign drug prices has been widely noted and often cited by advocates of Washington doing more to reduce prices. The White House paper, however, argued that pricing is amiss abroad, not in the U.S.,” says The Wall Street Journal.
But isn’t this an argument AGAINST proposed drug price controls? Indeed. The Trump administration and Congress are considering “policies that would essentially copy those countries,” explains Bloomberg, including an international price index, or IPI, basing prices in the United States on prices in those very foreign countries…which the same White House says would harm patients and cures.
BIO's Take: There’s no question other countries are not paying for the true value of our innovation. But instead of exporting the solution, the Trump administration wants to import the problem. A race to the bottom with other countries on pricing will destroy the development of new treatments, as well as delay or deny patient access to biomedical breakthroughs.
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