With new drug pricing order, Trump flirts with socialized medicine

With new drug pricing order, Trump flirts with socialized medicine

BY MERRILL MATTHEWS

President Trump’s recent executive order on drug prices gets almost everything right — except the solution. Ironically, that solution moves the United States toward socialized medicine, which the president vociferously opposes.

The order says, “Americans pay more per capita for prescription drugs than residents of any other developed country.” That’s certainly true for most brand name drugs, though Americans typically pay much less for generic drugs, which account for about 90 percent of all U.S. prescriptions — a fact often ignored in the health policy debates.

The EO is also correct that “Americans pay more for the exact same drugs, often made in the exact same places.” As a result, Americans “finance much of the biopharmaceutical innovation that the world depends on.” https://d0a997f558a95ead2e8d0c2375aca6dd.safeframe.googlesyndication.com/safeframe/1-0-37/html/container.html#xpc=sf-gdn-exp-4&p=https%3A//thehill.com

But Trump’s executive order won’t fix these problems. It will only make it as hard for American patients to obtain the newest, cutting-edge drugs as it is for many patients in foreign countries the president wants to emulate. 

The order forbids Medicare from paying more for drugs than the lowest price available in any member country of the Organization for Economic Cooperation and Development (OECD), after adjusting for per-capita income. Trump calls it a “most-favored-nation price.” 

The order claims those nations enjoy low drug prices because they “negotiate” with pharmaceutical manufacturers. But what the order describes as a negotiation is more akin to a hostage-taking — with their own citizens held for ransom. 

Bureaucrats in those nations’ systems – most of which are largely or completely controlled by the government – often refuse to cover drugs unless manufacturers sell the medicines far below fair-market prices. 

In Canada, for example, just 46 percent of new drugs approved worldwide between 2011 and 2018 are actually available to Canadian patients. And the average delay between approval and availability in Canada is 15 months. In the United Kingdom, it’s 59 percent and 18 months.https://d0a997f558a95ead2e8d0c2375aca6dd.safeframe.googlesyndication.com/safeframe/1-0-37/html/container.html#xpc=sf-gdn-exp-5&p=https%3A//thehill.com

But in the United States it’s 87 percent and three months or less.

Those are months – and in some countries, years – that patients go without access to the newest treatments. Some drugs are never made available. 

The U.S. government doesn’t treat its people so callously — or at least it hasn’t. Medicare covers virtually every FDA-approved medicine, and it sets reimbursements based on prices in the commercial market. This market-based pricing ensures that the newest drugs are available and doctors, not government gatekeepers, decide which drugs to prescribe. 

It’s a shame that the president has adopted other countries’ socialized medicine prices because he so often criticizes foreign freeloading. 

Recall that when Trump took office, he saw that our NATO allies were not paying their fair share toward the alliance’s mutual defense, even though the members had for years committed to raising their defense spending to at least 2 percent of GDP to support the alliance. 

With new drug pricing order, Trump flirts with socialized medicine

President Trump’s recent executive order on drug prices gets almost everything right — except the solution. Ironically, that solution moves the United States toward socialized medicine, which the president vociferously opposes.

The order says, “Americans pay more per capita for prescription drugs than residents of any other developed country.” That’s certainly true for most brand name drugs, though Americans typically pay much less for generic drugs, which account for about 90 percent of all U.S. prescriptions — a fact often ignored in the health policy debates.

The EO is also correct that “Americans pay more for the exact same drugs, often made in the exact same places.” As a result, Americans “finance much of the biopharmaceutical innovation that the world depends on.” https://d0a997f558a95ead2e8d0c2375aca6dd.safeframe.googlesyndication.com/safeframe/1-0-37/html/container.html#xpc=sf-gdn-exp-4&p=https%3A//thehill.com

But Trump’s executive order won’t fix these problems. It will only make it as hard for American patients to obtain the newest, cutting-edge drugs as it is for many patients in foreign countries the president wants to emulate. 

The order forbids Medicare from paying more for drugs than the lowest price available in any member country of the Organization for Economic Cooperation and Development (OECD), after adjusting for per-capita income. Trump calls it a “most-favored-nation price.” 

The order claims those nations enjoy low drug prices because they “negotiate” with pharmaceutical manufacturers. But what the order describes as a negotiation is more akin to a hostage-taking — with their own citizens held for ransom. 

Bureaucrats in those nations’ systems – most of which are largely or completely controlled by the government – often refuse to cover drugs unless manufacturers sell the medicines far below fair-market prices. 

In Canada, for example, just 46 percent of new drugs approved worldwide between 2011 and 2018 are actually available to Canadian patients. And the average delay between approval and availability in Canada is 15 months. In the United Kingdom, it’s 59 percent and 18 months.https://d0a997f558a95ead2e8d0c2375aca6dd.safeframe.googlesyndication.com/safeframe/1-0-37/html/container.html#xpc=sf-gdn-exp-5&p=https%3A//thehill.com

But in the United States it’s 87 percent and three months or less.

Those are months – and in some countries, years – that patients go without access to the newest treatments. Some drugs are never made available. 

The U.S. government doesn’t treat its people so callously — or at least it hasn’t. Medicare covers virtually every FDA-approved medicine, and it sets reimbursements based on prices in the commercial market. This market-based pricing ensures that the newest drugs are available and doctors, not government gatekeepers, decide which drugs to prescribe. 

It’s a shame that the president has adopted other countries’ socialized medicine prices because he so often criticizes foreign freeloading. 

Recall that when Trump took office, he saw that our NATO allies were not paying their fair share toward the alliance’s mutual defense, even though the members had for years committed to raising their defense spending to at least 2 percent of GDP to support the alliance. ADVERTISING

Trump did not respond to this inequity by swearing the United States would only spend as much as our stingiest ally. Instead, he called them out publicly and exhorted our allies to increase their contributions to our mutual defense, which was in everyone’s interest. And they responded.

With medicines, too, our allies don’t pull their weight, content to let U.S. patients and taxpayers carry the load. That hurts Americans and Europeans alike. If Europeans paid 20 percent more for drug costs – hardly closing the gap – Americans and Europeans would gain a combined $17.5 trillion benefit in overall welfare over 50 years, according to an analysis from University of Southern California researchers

New drugs – which cost an average of $1.6 billion each to develop – are paid for by the revenue from current treatments. That’s the capital drug manufacturers used to begin research on a COVID-19 vaccine — long before the federal government ponied up any cash.

If we cut that revenue stream, it’ll lead to less R&D and fewer innovative treatments in the future. One study of adopting “international reference pricing,” which is similar to the most-favored-nation pricing approach, found that it could reduce new drug discovery by 88 percent. That’s too high a price to pay for cheaper drugs now. When friends and allies engage in self-destructive behavior, the correct response is not to emulate their mistakes, but to help them choose a better path. Today, the majority of new drugs invented globally are invented in America, in large part because our government does not dictate prices. The president should keep it that way, and, just as he did with NATO, demand that our allies fall in line. 

BY MERRILL MATTHEWS, OPINION CONTRIBUTOR— Appearing in the Hill on 10/08/20

Merrill Matthews is a resident scholar with the Institute for Policy Innovation in Dallas, Texas. Follow him on Twitter @MerrillMatthews.

Arizona Conservatives bash FDA for regulatory assault on e-cigarettes

Arizona’s own Goldwater institute has joined a number of center-right leaders in urging Trump’s FDA to stop government overreach into personal health decisions. The coalition is calling a proposed crackdown on e-cigarettes a regulatory assault. Conservative groups nationwide are calling on President Trump to halt FDA commissioner Gottlieb’s panic driven regulatory action.

“FDA Commissioner Scott Gottlieb’s effort to curb the $6.6 billion electronic cigarette industry and an even larger reduced risk tobacco alternatives market is inconsistent with your clearly articulated deregulatory objectives and will destroy jobs, limit consumer freedoms, and harm public health.  

This week, a Washington Post op-ed bashed the FDA over its recent crackdown on vaping and e cigarettes

As the column noted, “Last week, a large trial published in the New England Journal of Medicine and led by British researchers showed people trying to quit cigarettes were almost twice as likely to succeed if they used e-cigarettes instead of conventional nicotine-replacement therapies such as patches and gum.”

Nevertheless, FDA commissioner Gottlieb shows no sign of backing down. In an interview Sunday, he said that while the FDA supports the role of e-cigarettes in helping adults quit smoking, “it’s now clear that widespread and sometimes reckless marketing of these products has come at the expense of addicting a new generation of kids on tobacco.”

This is irresponsible at best, and completely inaccurate. Vaping technology is not marketed to kids, and is a great resource for adults who wish to quit smoking.

The letter to President Trump was signed by more than a dozen conservative groups, including Arizona’s Goldwater Institute, ALEC action, Americans for Tax Reform among others. A copy of the letter can be read here.

Congressman Andy Biggs Submits Two Amendments for the REINS Act

Washington, DC (January 4) – Today, Congressman Andy Biggs (AZ-05) announced that he had submitted two amendments to the Regulations from the Executive in Need of Scrutiny Act of 2017 (REINS Act). The REINS Act seeks to restore oversight authority to Congress for any major federal regulation that could potentially cost the U.S. economy at least $100 million. Congressman Biggs also testified in front of the House Rules Committee on behalf of his two amendments this afternoon.

“I am pleased to have offered up two amendments to the REINS Act and to have defended the amendments in the Rules Committee,” Biggs said. “Many small businesses and individuals in my district have been negatively affected by the ripple effect caused by an out-of-control rules-making process by unelected and unaccountable federal bureaucrats. I promised my constituents that I would strongly support the REINS Act, and I have kept my promise. I will continue to push for the passage of the REINS Act to ensure that Congress takes back this very-important job of rule-making oversight.”

Watch Congressman Biggs’ testimony in front of the Rules Committee.

Congressman Biggs offered the following two amendments to the REINS Act:

Amendment #4: Defines all rules promulgated by the Environmental Protection Agency as “major.”

Amendment #5: Lowers the annual economic effect threshold for a major rule from $100,000,000 to $50,000,000.

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Congressman Andy Biggs is a first-term Representative from Arizona’s Fifth Congressional District, representing parts of Chandler, Gilbert, Mesa, Sun Lakes, and Queen Creek. He lives with his wife Cindy in Gilbert.

MBQF Launches Public Opinion Survey Service – Electric Deregulation Top Issue for Maiden Release

MBQF

Public Policy and Public Education Objective of Service

(Scottsdale, AZ) — MBQF Consulting founder and CEO Mike Noble today announced his objective to provide a quarterly service to inform and enlighten Arizonans on the public policy issues being debated in Arizona and around the Nation. Noble, who is not representing or retained by either side of Arizona’s Electric Deregulation debate being considered by the Arizona Corporation Commission, indicated that future topics would concern issues being considered by the Arizona legislature, the Congress of the United States, as well as multiple ballot initiatives.

“Arizona voters are some of the most engaged in the nation,” Noble said. “By helping identify voters public policy attitudes to decision makers and key stakeholders, we are ensuring their concerns are more clearly understood. It helps enhance the quality of discourse in our state and brings more people to the table.”

MBQF surveyed 516 high efficacy Arizona voters between August 5th and 7th, 2013. Voters were given a summary explanation of the deregulation issue, and then asked whether they supported, opposed or were undecided about electric deregulation. Issue explanations were randomized to present the question in a different order to each half of respondents.

Among Arizona high efficacy voters, 32% of respondents say they support deregulation, 41% say they oppose it, and 27% remain undecided. Republicans are split nearly evenly, with 35% supporting deregulation to 38% who oppose it, and 27% still undecided. Just 26% of Democrats support deregulation, while 45% oppose and 28% remain undecided.   Independent voters showed 34% support, 42% oppose and 24% remain undecided.

“A lesson we take from this is that no side in this debate has really gained any huge dominance over the other,” said Noble. “As is so frequently the case, influence rests with the undecided voters, and that puts all the more pressure on the companies and the stakeholders in this debate to develop new and more convincing arguments to reach Arizona citizens.”

For more information about this survey, or a summary of topline data and wording, please contact Mike Noble at the number above. Included in this survey were 516 autodial responses with rotating samples to ensure issue fairness. The Margin of Error for this survey is +/-4.3% at the 95% confidence level.