08/27/2025
Sometimes the best intentions have dire consequences. The following opinion piece on drug price controls sums up well what will likely happen to innovation and accessibility if the government interferes in the market.
We MUST get drug prices under control, but we can't target those who bring them to market. Instead we need to target those who corrupt the market - i.e. pharmacy benefit managers who put their profits over your health.
Importing foreign price controls won’t lower drug prices
Washington Examiner by Nicholas Armstrong
08.27.25
Complex problems are rarely solved by a simple stroke of a pen. President Donald Trump‘s proposal to enact a most-favored-nation policy for drug pricing in the United States will do more harm than good. Trump is correct to seek to lower drug prices, as the U.S. has the world’s highest drug prices compared to other developed countries. But enacting price controls will leave Americans with fewer choices without addressing the actors responsible for high drug prices in the U.S. Trump’s most favored nation policy is simple: It ties drug prices paid by Medicaid and Medicare to the lowest price paid by other developed nations such as the United Kingdom, Canada, or Germany. If patients in other developed countries pay lower prices for drugs, then Americans should pay those lower prices as well. While this seems like a good idea at first glance, it ignores a number of complexities and basic economic realities. MFN agreements are price ceilings that set a maximum allowable price for payers (such as Medicaid and Medicare) based on other countries’ prices. When price ceilings are set below the market price, shortages occur — for proof, just look at the very countries that we would be relying on to set prices. Medicaid already enjoys the lowest available domestic price under the best price rule. Under the best price rule, drug manufacturers must provide Medicaid with the lowest price offered in the drug market. In some cases, Medicaid drug costs can be reduced by 50% or even 100%. If artificially low drug prices from other countries were applied to Medicaid, it would further distort the market and make it unsustainable for drug manufacturers to participate. This would force manufacturers out, leaving Medicaid patients with fewer drugs and treatment options. The MFN policy would also trigger even greater discounts to an already broken program through 340B, a program that large hospital systems use to enrich themselves. The 340B program was created in 1992 to give nonprofit hospitals and safety net hospitals the ability to buy outpatient drugs at a steep discount. In theory, the savings are supposed to be passed along to low-income and uninsured patients, but there’s no federal law requiring hospitals to use revenues on low-income patients or to disclose how much money they make from the sale of the discounted drugs. In 2022, hospitals reported an estimated $44.1 billion in revenue from 340B, while only spending $18.5 billion on charity care for low-income and uninsured patients. Of all the policies that stand to fix drug prices in the U.S., such as regulatory reforms, price transparency, or requiring 340B profits to be spent on its intended population, price controls remain an ineffective policy.
U.S. Rep. Nicole Malliotakis, Congressman Nick LaLota , Rep. Andrew Garbarino, Rep. Claudia Tenney. Senator Chuck Schumer, Congressman Hakeem Jeffries
