July 23, 2020, Fairfax, Va.—Americans for Limited Government President Rick Manning today issued the following statement urging President Donald Trump not to issue an executive order on drug pricing for the International Price Index:
“The White House is considering an Executive Order on drug pricing which would be a disaster for future generations. The proposal being considered is known as IPI (International Price Index) and it would tie U.S. drug prices to those paid in foreign, socialist countries. What the heck are they thinking?
“One of the hallmarks of the Trump administration is to create an America First policy, and now on drug pricing, the White House is considering tying the prices Americans pay for medicines to foreign government dictates? Beyond the obvious destruction of innovation by drug companies that will harm today’s seniors and generations to come, one of the prime lessons from the Chinese-originated virus crisis has been that America needs to bring the drug manufacturing sector home. Foreign fixed pricing incentivizes pharmaceutical companies to skirt U.S. safety and cleanliness standards in favor of cheap foreign manufacturing because if they are price controlled on one end, they will need to cut costs on the other. Rather than decreasing our dependency on foreign-made drugs, this will dramatically increase it. Just exactly the opposite of what the President is hoping to accomplish with this critical supply chain.
“What’s more, if you ever wanted to create a pathway to socialized medicine then offshoring domestic drug prices to foreign governments will certainly take the market out of a major part of the health equation. When combined with the Democrats attempt to create one-sized fits all health care rates across the nation under the guise of ‘Surprise Medical Billing’ the impediments to a complete federal takeover of our nation’s health care system will have been paved.
“If the Trump administration wants to actually help flatten or lower prescription drug costs, they should engage in a full review of the Food and Drug Administration regulations which empower bureaucrats to impose millions of dollars of costs on prospective new drugs simply because they can. In 2014, Tufts University found that the average cost of bringing a new drug to market is $2.6 billion. With patent lengths of approximately twenty years, the long, drawn out FDA approval process eats up approximately twelve years from the laboratory to the pharmacy shelf, and once the patent life starts ticking, the drug developer is in a race against the clock to be able to recoup their costs and make a profit. While this is a little bit apples to oranges, a twenty year patent life and a twelve year timeline to get to market provide less than a decade for the drug inventor to make it worthwhile to have spent a lifetime developing a cure.
“To cut drug costs, the administration should mandate a comprehensive review of FDA approval requirements with a focus on those that drive the cost of bringing drugs to the market through the roof. Small, innovative drug manufacturers simply cannot compete when there is a regulatory-driven $2.6 billion cost to bring their cures and treatments to market. The answer to high drug prices is not found in foreign socialist government pricing models but instead in making the cost for new drug development dramatically lower so there will be more competition in the marketplace.”
Interview Availability: Please contact Americans for Limited Government at 703-383-0880 ext. 1 or at media@limitgov.org.
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