75 free market, conservative, and libertarian organizations and activists today released a letter in opposition to the interim final rule to implement the Most Favored Nation (MFN) drug pricing proposal. The signatories urge this proposal to be withdrawn.
The proposal imports foreign price controls into America’s healthcare system, which will harm medical innovation and the development of new medicines. It will threaten high-paying American manufacturing jobs and do nothing to stop foreign freeloading. Instead, it will shift the U.S. closer to a system of socialized healthcare.
The need for free market policies that promote American medical innovation is clear. Manufacturers have developed several highly effective COVID-19 vaccines at the fastest rate ever. This good news is only possible because the U.S. leads the world when it comes to developing innovative, lifesaving and life enhancing medicines.
The full letter can be found here and a summary of points is below.
The MFN would do nothing to stop foreign freeloading
Though one of the goals of the MFN is to end foreign freeloading, the proposal would instead surrender to foreign freeloading by basing U.S. prices on the prices of countries with socialist policies.
Foreign countries pay less for medicines because they utilize price controls. There is little or no negotiation between foreign government and manufacturers which often forces innovators to accept lower prices in a “take-it-or-leave it” proposition.
The MFN would reduce access to new cures
Foreign price controls will cause less medical innovation and result in fewer new treatments and cures. If the U.S. had the same price controls utilized by foreign countries, we would have many fewer innovative cures available to patients today. As the letter notes:
“According to a study by the Galen Institute, patients in the U.S. had access to nearly 90 percent of new medical substances launched between 2011 and 2018. By contrast, other developed countries had a fraction of these new cures. Patients in the United Kingdom had 60 percent of new substances, Japan had 50 percent, Canada had 44 percent, and Spain had 14 percent.”
The MFN will threaten millions of high-paying jobs
America is a leader of high-paying pharmaceutical manufacturing jobs and medical innovation is a key driver of job creation. This innovation accounts for 800,000 direct jobs and over 4 million jobs when indirect and economically induced jobs are taking into account.
Politicians on both sides of the aisle routinely call for the creation of more high-paying manufacturing jobs. We should be pursuing policies that help create more of these jobs, rather than policies that threaten existing jobs.
The MFN will move America one step closer to a government run healthcare system
The MFN would put the U.S. on the path towards socialized medicine by placing price controls on Medicare Part B. This would eventually lead to significant tax and spending increases and the loss of existing coverage for millions and millions of Americans.
It would also lead to health care rationing, which occurs in other nations that have socialized health care, such as Canada and the United Kingdom. In the UK for instance, there was a shortage of 10,000 doctors and 43,000 nurses in 2019, with 9 in 10 managers in the National Health Service saying that having too few doctors and nurses presents a danger to patients. At any one time, 4.5 million patients were waiting for hospital care.
The MFN Utilizes Obamacare to Circumvent Article I of the Constitution
The MFN is being proposed through CMMI, an agency created by Obamacare. The MFN demonstration is mandatory and being conducted nationwide as a major policy change that circumvents Congress. As the letter notes:
“CMMI and the MFN violate Article I of the Constitution, which gives Congress, not the executive branch the authority to make law. CMMI is not under the normal appropriations process and automatically receives $10 billion every decade in perpetuity. As a result, Congress is limited in its ability to conduct routine, necessary oversight.”