Writing for the Wall Street Journal this week, former FDA Associate Commissioner Peter Pitts has a timely reminder on why allowing the importation of overseas drugs in an effort to save money – despite being proposed for decades– remains a bad idea that would produce scant savings while hampering continued innovation and investment. Regarding the supposed savings of such a policy, Pitts writes:
The prospect of huge savings through drug importation is enticing but fanciful. The Department of Health and Human Services has calculated that legalizing importation would shave only 1% to 2% off the nation’s collective pharmaceutical bill, with less than half that flowing to consumers.
Pitts also points out that the U.S. is the world leader in research and development of new medicines due to our “strong intellectual-property laws, coupled with a comparatively free-market pricing system.” Between 2001 and 2010, the U.S. produced 57% of new medicines in the world today.
As a nation, we value innovation to find cures and save lives. But other countries have not followed our lead in valuing and promoting innovation with strong IP protections and incentives, electing to impose price controls on prescription drugs – including those developed in the U.S. This leaves U.S. companies trying to recoup their investment in a predicament: sell at steep foreign imposed discounts or refuse to sell and face the threat of broken patents.
The bottom line is that foreign countries freeload off American medical innovation, enjoying the fruits of U.S. ingenuity while forcing American consumers to shoulder a disproportionate share of the burden of funding research.
But Pitts is hopeful that President Trump might have the negotiating skills to eliminate foreign pricing practices that unfairly leave U.S. consumers footing the bill:
Rather than further undermine American companies by importing price-controlled drugs, the Trump administration would be wise to stand up on behalf of U.S. researchers. The Bipartisan Congressional Trade Priorities and Accountability Act of 2015 requires the federal government to negotiate trade deals that “achieve the elimination of government measures such as price controls and reference pricing which deny full market access for United States products.” Mr. Trump might actually have the negotiating skills to turn that goal into reality.
Read the full WSJ op-ed here.
Powered by WPeMatico