ATR Applauds Trump Efforts To Lower Drug Prices, Promote American Innovation

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Posted by Alex Hendrie on Friday, May 11th, 2018, 5:25 PM PERMALINK

President Donald Trump and HHS Secretary Alex Azar today outlined the administration’s “American Patients First” plan to lower the cost of medicines, increase competition, promote innovation, and hold foreign governments accountable.

Importantly, President Trump and Secretary Azar recognize the damage that Obamacare has caused in increasing drug costs through its web of crushing taxes and perverse market incentives. Obamacare has even imposed a tax directly on prescription drugs totaling $4.1 billion this year.

Trump should also be commended for promising to get tough on foreign countries that are freeloading off American innovation and for directing U.S. Trade Representative Lighthizer to address this issue in the context of free trade agreements.

The U.S. represents one-third of the market for medicines in the developed world, but pays for as much as 70 percent of the costs, according to the President’s Council for Economic Advisors. Price controls in foreign countries have suppressed innovation and resulted in artificially higher prices for U.S. consumers, as the administration has previously noted:

“…foreign, developed nations, that can afford to pay for novel drugs, free-ride by setting drug prices at unfairly low levels, leaving American patients to pay for the innovation that foreign patients enjoy…. If the United States had adopted the centralized drug pricing policy in other developed nations twenty years ago, then the world may not have highly valuable treatments for diseases that required significant investment.”

In his speech, Trump also outlined plans to increase competition, strengthen free market tools that exist in Medicare Part D, create stronger incentives to lower costs, and ensure patients have access to the medicines they need.

ATR is excited to work with the administration as these proposals move forward.

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