Adopting European Socialism Will Not Improve Prescription Medicines
President Trump is set to visit Great Britain in June where he will meet with Prime Minister Theresa May and address the UK Parliament. Along with Brexit, bolstering NATO and continuing to fight extremism, President Trump should also put new pressure on our ally to take on a larger share of the cost of developing innovative medicines.
Florida Governor Ron DeSantis, who represents America’s largest population of senior citizens, is trying to find a way to lower prescription prices in his state. DeSantis has proposed allowing individuals to buy medicine from Canada and other foreign countries. For too long, we have been told that importing European and Canadian price controls is the key to lowering the out-of-pocket costs for Americans. Proponents say: adopt European socialism and the prescription cost problem is solved.
Not so fast.
Another example of European socialism being pushed was pointed out by Grace-Marie Turner who leads the Galen Institute. The U.S. Department of Health Human Services is contemplating a proposal that would pay for Medicare Part B medicines administered in doctors’ offices, hospitals and clinics based upon an international index of the average prices paid in 14 developed countries, including Canada, the United Kingdom, and France. Turner warns the proposal is a “foot-in-the-door for price controls.”
The solution is not to import European socialism, but to export American capitalism. Foreign governments, including most of the 14 countries which HHS is using for its index, subsidize or set the prices of medicine based upon government dictates. The result is that the United States, which oversees safety but relies primarily on market pricing, pays for a disproportionate share of the cost to research and develop new medicines.
Most medicines, unlike most manufactured goods such as cars or washers and dryers, require specifically targeted and unique solutions. Whether cancer, Alzheimer's, heart disease or arthritic pain, each disease requires a unique line of research and development. And medical science is on the cusp of a new era where diseases that have tormented us for generations can actually be cured. We want a system that delivers affordable medicines but that is also investing in the next cures.
Prescription medicine companies have plenty of critics, each with a politically potent argument, but few are being honest with the public about how pharmaceutical and biotech companies are improving the quality of life. Researchers at these companies are creating miracles. They are searching for cures to help people avoid life-altering tragedies such as having to care for a loved one who no longer remembers their name or facing the unimaginable fear of losing a child to cancer.
A recent study conducted at the University of Southern California notes that if Europe were to increase its spending on prescription medicines by 20%, there would be a benefit over the next 50 years of up to $10 trillion in the United States and $7.5 trillion in Europe -- not to mention creating exponentially more resources for research.
The Trump Administration has taken steps towards affordability. The President and Congress should be lauded for passing the 21st Century Cures Act which takes bold steps to fast-track innovation, cuts red tape in medicine development and helps lower costs at the pharmacy counter for seniors. Further, Members of Congress who voted for eliminating the tax penalty for Americans who had been forced to purchase expensive, mandated Obamacare plans should be given credit.
The big debate is still about how to get lower prices while still supporting innovation. Global price controls should be just as much of a trade concern as Chinese theft of intellectual property or regulatory overreach from the European Union. President Trump should call on the world’s leading economies to participate in America’s market-driven approach to promoting medical cures. Our system clearly works because the majority of new medicines today are created in America.
The best way to drive down the over-the-counter cost of American medicine is to promote a free-market globally in which the world’s leading economies are paying a fair share of the cost of new medicines.
David Avella is the Chairman of GOPAC
