The Trump administration has rightly called out Europe for backwards government policies. High taxes punish entrepreneurial success and strict regulations undermine their economies. But in a puzzling about-face, the White House is now proposing importing European-style price controls for prescription drugs into America.
The mental gymnastics required to reconcile the new posture is dizzying and should be a red flag for Republicans. President Trump’s healthcare team should return to the drawing board—instead focusing on fostering patient choice and price transparency to lower costs rather than heavy-handed government dictate.
What exactly is the White House proposing? To peg the cost of medicine to the prices paid by countries like France, the U.K., and Canada. At first glance, the framework may sound beneficial, but the devil is in the details.
The healthcare systems in Europe and Canada are largely government-controlled. As a result, strict government price controls force drugmakers to sell medicine at below market rates. Sure, that dynamic has short term benefits in the form of cheaper prescription drugs. But ripping up the free market and mandating artificially low prices has devastating consequences that are already on full display.
Across the pond, misguided drug price controls have undermined patient access to medicine. European markets are less attractive to companies looking to invest in new biomedical capacity and innovation. As a result, the in-country pharmaceutical industries have eroded—leading to medicine shortages and supply chains that are dependent on other, sometimes hostile foreign countries.
Patient access to cutting-edge treatments, therapies, and vaccines also lag behind. Developing and bringing a new drug to market takes years and costs billions of dollars. If recouping those research and development costs becomes economically unfeasible, resources to explore and deploy the next medical breakthrough in particular countries or regions dry up. That’s why although Americans pay a premium for medicine, we have near immediate access to the latest, most effective drugs in the world.
Losing America’s biomedical edge by importing healthcare policies from across the Atlantic is not part of the ‘America First’ agenda. The proposal undercuts other initiatives already launched by the Trump administration to eliminate costly government inefficiencies and incentivize more domestic manufacturing of medicine to shield supply chains from China. The White House needs to be careful to not trip on its own shoelaces.
In April, for example, President Trump directed Health and Human Services Secretary Robert F. Kennedy Jr. to address free market manipulation within the drug market to lower costs and expand patient choice. And earlier this month, the White House moved to streamline the regulatory process for building new biomedical facilities here at home.
Meanwhile, Republicans in Congress are resurrecting efforts from Trump’s first term to expand access to Association Health Plans (AHPs) for small businesses. Currently, Main Street is largely barred from joining together to shop around for more affordable group health plans. Legislation has already been introduced in Congress to make it easier for small businesses to take advantage of the option and attain discounted health plans via free market mechanisms.
In many policy areas, the Trump administration is laser-focused on ensuring Americans get a fair shake. But instituting Europe’s foolish healthcare price control scheme in the U.S. is a lousy idea that will come at the expense of patients and torpedo prudent efforts to ‘Make America Health Again.’ European-style socialism is not what the doctor ordered.
Dr. Chris Stansbury is a partner at West Virginia Eye Consultants. He is a former Republican member of the West Virginia House of Delegates, as well as a partner of the Job Creators Network Foundation.
