Watchdog Slams President Trump for Drug Price Controls

For Immediate Release
September 14, 2020
Contact: Grace Morgan
(202-855-4380)

WASHINGTON, D.C. – Today, the Taxpayers Protection Alliance (TPA) slammed the Trump administration for imposing onerous price controls on medications covered under Medicare Parts B and D. On July 24, President Trump signed an executive order tethering drug reimbursement rates set under Medicare to artificially low prices charged by countries with socialized healthcare systems. Drug prices under Medicare Parts B and D were ordered to be set lower than the prices set in other developed countries unless drug manufacturers agreed to a “deal” before August 24. That deadline has since passed, and now President Trump is determined to move forward with price caps on critical drugs regardless of the impact on healthcare choices, drug supply, or innovation.

TPA President David Williams criticized this “most-favored nation” plan, stating, “thanks to strong intellectual property protections enshrined in the U.S. Constitution and price flexibility, drug innovation has flourished in the U.S. Bringing a medication to market certainly isn’t easy. Development and regulatory costs typically exceed $2 billion and it takes more than a decade to bring the average medication to market for consumers. Mandating artificially low prices for medications will make it far more difficult for innovators to get lifesaving drugs to consumers’ doorsteps at the worst possible time. As America struggles to cope with the worst public health emergency in our lifetimes, it’s never been more critical to keep the development and innovation pipeline open.”

Williams continued: “President Trump’s plan would have the federal government adopt the failed policies of European countries in divining prices for key medications. Europe’s 50-year experiment with price-fixing has led to an exodus from the continent by leading drug manufacturers. Since the 1970s, the share of new medications originating in countries such as Germany, France, and the U.K. has halved as companies sought refuge in the U.S. And European consumers have paid the price in the form of chronic shortages of lifesaving medications such as statins. Australia has a similar price-fixing regime and has experienced crippling medication shortages. In fact, less than half of all medications launched in the U.S. over the past decade have found their way to the Land Down Under. Even for medications that are given the go-ahead, Australians must wait an average of 19 months longer to access these medications than their American peers. Consumers and patients deserve better than chronic medication shortages and stymied innovation.”

Williams concluded: “At this difficult time, America is counting on a vibrant, innovative healthcare system that continues to quickly deliver lifesaving medications to consumers. Shackling this system to price controls and government dictates will undermine affordability while complicating treatment for millions of patients. President Trump must reject this flawed proposal and embrace competition, flexibility, and choice in medicine.”

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