Posted on 09/26/2020 6:01:36 AM PDT by Kaslin
You cannot have your cake and eat it, too. It is a tale as old as time. But apparently, with its latest “Most Favored Nation” executive order on drug pricing, the Trump administration has stumbled upon a solution to this conundrum.
Or so they would have you believe.
The entire phenomenon centers around the hotly contested Affordable Care Act (ACA), or Obamacare. On one hand, the Trump administration is litigating before the Supreme Court in favor of the entire law being struck down as unconstitutional. On the other hand, the administration would like to use an obscure provision within the very same law in order to implement its new drug pricing mandate.
Can you see the problem?
Before we can even discuss the merits of price controls and their implications for our healthcare system, simple logic should have dismissed this latest action when it was first proposed. If you believe a law to be unconstitutional and invalid, how can you then use that law to carry out a particular policy agenda? The numbers simply do not lie. And perhaps this is why this particular executive order stayed under lock and key until September 13th—nearly two months between its signing and when it officially went into effect.
If you still are not sold, that is OK. After all, the Supreme Court could very well uphold the ACA as constitutional. If that happens, it would be easy to assume that President Trump’s executive order would then be in the clear. Fortunately, these assumptions are far from accurate and there is plenty of policy and precedent standing in stark opposition to this executive action.
A “most favored nation” pricing model is an extreme form of international price indexing (IPI), where price caps on certain drugs are put in place based on an average price obtained from a select group of other countries. These arbitrary price controls would have devasting effects on our access to groundbreaking drugs. The U.S. would be basing its drug market off of Europe, where socialized, restricted medicine is the norm. And such an approach exceeds the statutory authority of the executive branch. Under basic constitutional separation-of-powers principles, “sweeping” and “very dramatic”—the president’s own words—changes to major federal programs must be authorized by Congress. To date, Congress has flatly rejected any form of international price controls. Period.
The executive branch hopes to carry out its ambitious plan through an obscure clause in the Affordable Care Act, whereby modest authorization for testing “pilot projects” in underserved populations is authorized. According to President Trump, however, this new order contains “the most far-reaching prescription drug reforms ever issued.” But an unprecedented new program that will disrupt the entire healthcare sector is a far cry from a modest “pilot project.”
Simply put, the authority to execute this administration’s latest drug pricing mandate simply is not there. The same administration is fighting to strike down the very law it is using for this order. Congress has already plainly rejected the international pricing model. And the ACA itself does not grant the statutory authority for such a measure in the first place.
Until recently, this administration had a good record on healthcare—fighting to protect American innovation and promoting measures such as rebate reform and price transparency. Why, then, reverse this approach in favor of dangerous and unconstitutional executive actions?
President Trump is at his best when he is fighting for America, and he must return to supporting our pharmaceutical innovators that will get us through the current health crisis. We must stop “global freeloading” off of American innovation and negotiate more favorable deals with foreign governments. We need them to contribute their fair share toward research and development costs for new treatments and vaccines that are changing the world. These are solutions that will lower drug prices.
The president is a dealmaker, and that is exactly what we need during COVID-19. America must leave the cake outside and return to the head of the table.
So it seems like Europe has been able to build its socialist utopia by having the USA pay its defense costs AND its drug development costs, right?
Obama and supreme court showed us that executive orders overrule mere laws.
“A “most favored nation” pricing model is an extreme form of international price indexing (IPI), where price caps on certain drugs are put in place based on an average price obtained from a select group of other countries. These arbitrary price controls would have devasting effects on our access to groundbreaking drugs. “
Nonsense. Is Europe denied “access to groundbreaking drugs”? No. Japan? No. Other major OECD nations? No.
If the major drug manufacturers can settle on government fixed prices in Europe and other OECD countries, how then can they complain about the U.S. demanding prices commensurate with the averages of such prices in the OECD nations? To whom will they turn?
No. A major drug market like the U.S. is not going to be abandoned by big pharma due to the policy Trump’s executive order lays out.
They will see they have a choice. That choice will be either to (a) see their U.S. profits come in line with the lower profits it makes in Europe and other OECD nations, or (b) find a way (negotiate) bigger profit margins from those nations with whom it is now accepting government dictated prices.
What the authors do not see is Trump has laid done a card in virtual negotiations with big pharma. The next move is up to them. Either way Trump is telling big pharma the American consumer is going to quit subsidizing the lower prices it gives to other major economies.
Americans should not be discriminated against by drug companies.
I fully support Trump in his effort to end pharmaceutical price discrimination against Americans.
I think you have the right of it.
Townhall = The country club, Sans-A-Belt faction of the RINO party.
Trump will have to do something to reset the medical system over the next four years. If he can’r get it done (and he can’t do it himself), the Dems will in 2025. And you can bet that will be a disaster.
Globalist BS. They sell drugs dirt cheap overseas, following every socialist rule in those countries, but when someone makes them stop charging Americans two to ten times as much, they become Adam Smith.
The answer is for drug companies to tell the EU they cannot have access if they insist on a below market price. They make Americans subsidize the EU by paying extra. Thank you Trump! Brave considering how much money and women pharma dumps on Congress.
Honestly a much better way to deal with the pricing is to alter the exclusionary time frame and rules. That’s the big source of the trouble. When you make a new drug you get a certain window when nobody else gets to make it. So you can charge whatever you want. One of the problems we’re running into now is they keep tweaking drugs so they’re making “new” drugs constantly, before the window on the previous version expires. So they keep being able to charge whatever they want. Move that window from years to months. Then competition enters the market, and drives prices down.
The writer is a globalist dumb$hit who has no understanding of tactics. Trump is using their own bad stuff against them. He is running at least two games on this right now. Maybe one of them will pay.
> tell the EU they cannot have access if they insist on a below market price
Don’t you think that taking away the US as their cash cow will force that to change?
My original health care reform plan allowed insurers to buy such drugs as they wanted at such prices as they were willing to pay after negotiation with drug makers, with age-based minimum total tender requirements imposed on insurers.
There are no government price controls in such a method.
This all comes from the fact that manufacturing a drug is cheap compared to developing it. Remember years ago with all the crying about grandma having to cut pills in half? That came from pharma pricing pills largely per presciption rather than per gram because the incremental price per gram is tiny. Thus a 30 day supply of a drug cost about the same amount whether you got 30 of the 25 mg, 50 mg or 100 mg pills. The doctors would prescribe 15 of the bigger pills rather than 30 smaller pills, but only a half pill per day. That would cut the price per month by about half. For some reason this stopped. Most of the crying was from pharma. Maybe the off-label half month perscriptions were outlawed.
This all comes from the fact that manufacturing a drug is cheap compared to developing it. Remember years ago with all the crying about grandma having to cut pills in half? That came from pharma pricing pills largely per presciption rather than per gram because the incremental price per gram is tiny. Thus a 30 day supply of a drug cost about the same amount whether you got 30 of the 25 mg, 50 mg or 100 mg pills. The doctors would prescribe 15 of the bigger pills rather than 30 smaller pills, but only a half pill per day. That would cut the price per month by about half. For some reason this stopped. Most of the crying was from pharma. Maybe the off-label half month perscriptions were outlawed.
The English NHS uses a per patient capitated method under the control of the doctor.
If a doctor has 1000 medical home patients and $1000 per patient in capitation on average, he has a drug budget of $1000000 annually. The English doctor decides how he spends the $1000000.
In France, a government commission determines a recommended price. If accepted by the drug maker, insurers must pay the price. If the price is refused by the drug maker, the drug need not be covered by insurers.
The author, George Landis, is a big pharma shill. The special interest has spoken.
In the article says Congress has to approve it, international price basing, and so far they have refused. Why? Lobbyists donations to help the Congress people no doubt is the thing holding them back from helping their constituents have more affordable drug prices.
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