U.S. must ensure fair drug prices internationally

The America First Policy Institute has highlighted a significant issue regarding the cost of pharmaceuticals. It notes that countries outside the United States benefit from American medical innovation without paying their fair share. As a result, American consumers bear most of the costs for drug development. President Trump has been addressing similar concerns in defense spending, urging NATO allies to contribute more. The same approach should be applied to drug pricing, according to experts. However, the proposed solution, known as "most-favored-nation" (MFN) pricing, suggests that Medicare drug prices should match the lowest prices seen in countries like Canada and the UK. Critics argue that MFN pricing oversimplifies the situation. Many European countries negotiate deep discounts with pharmaceutical companies aggressively, sometimes using threats that could impact patent rights. If U.S. companies banded together to reject these terms, they could face legal consequences for anti-competitive behavior. Supporters say MFN could lead to higher prices in Europe, but this is unlikely. Adopting MFN could harm U.S. pharmaceutical innovation. The cost to develop new drugs is around $2.6 billion, taking years before these reach patients. If U.S. prices are forced down, it could lead to a significant drop in research and new drug development. Research indicates that reducing U.S. drug prices too much could result in fewer new medicines coming to market. Most new treatments are first available in the U.S. due to its higher compensation for drug makers. Lowering American prices could encourage foreign countries to pay even less. As other countries, like China, enhance their biotech capabilities, the U.S. risks losing its leadership in medical innovation. The administration is urged to use existing trade tools to make foreign nations pay fair prices for drugs developed in America. This strategy can help sustain U.S. innovation and ensure patients have access to new treatments.