Congress Should Not Impose Foreign Price Controls On Innovative Drugs
The post Congress Should Not Impose Foreign Price Controls On Innovative Drugs appeared on BitcoinEthereumNews.com. VALUE and PRICE balancing getty 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. To start with, price controls diminish drug availability. Thanks to price controls, patients in the other major industrialized countries (OECD) have access to only 29% of new medicines while patients in the U.S. have access to 85%. Even worse, patients in Canada and the U.K. can wait years for access to the latest treatments in some cases, and at any given time in Canada, there is a shortage of between 1,500 and 2,000 drugs. In those cases where the drugs are available in foreign nations, adopting the MFN policy outsources U.S. health policy to these countries. The U.S. should not impose price controls, but if it does, drug pricing decisions should not be outsourced to the EU, UK, or Canada. Adopting the MFN will also harm innovation. Developing a new drug takes a lot of time and money. On average, developing one innovative drug takes over $2.9 billion (including post-marketing expenditure) and between 10 and 15 years. It is also a risky endeavor. Approximately 9 out of every 10 drugs that reach the clinical trial stage will…
The post Congress Should Not Impose Foreign Price Controls On Innovative Drugs appeared on BitcoinEthereumNews.com.
VALUE and PRICE balancing getty 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. To start with, price controls diminish drug availability. Thanks to price controls, patients in the other major industrialized countries (OECD) have access to only 29% of new medicines while patients in the U.S. have access to 85%. Even worse, patients in Canada and the U.K. can wait years for access to the latest treatments in some cases, and at any given time in Canada, there is a shortage of between 1,500 and 2,000 drugs. In those cases where the drugs are available in foreign nations, adopting the MFN policy outsources U.S. health policy to these countries. The U.S. should not impose price controls, but if it does, drug pricing decisions should not be outsourced to the EU, UK, or Canada. Adopting the MFN will also harm innovation. Developing a new drug takes a lot of time and money. On average, developing one innovative drug takes over $2.9 billion (including post-marketing expenditure) and between 10 and 15 years. It is also a risky endeavor. Approximately 9 out of every 10 drugs that reach the clinical trial stage will…
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