Lowering Medicines Costs by Adopting Overseas Drug Pricing not Feasible for U.S. Citizens

In an attempt to address one of the most common complaints about America's healthcare system - high drug prices - President Donald Trump signed an executive order in his final days in office. The order aimed to push drug companies to sell their products at the lowest price found in other developed nations.

The Food and Drug Administration (FDA), under Trump's administration, made an unprecedented push to approve generic competitors for brand-name drugs. This move, which permitted more than 3,000 drugs, was a significant step towards unleashing competition in the pharmaceutical industry, the surest path to lower costs.

Trump's strategy also included introducing the "Most-Favored-Nation Prescription Drug Pricing" executive order. This policy requires pharmaceutical companies to offer in the U.S. the same prices as in the lowest-priced Organisation for Economic Co-operation and Development (OECD) countries with significant economic comparability.

Trump's efforts extended beyond just this order. He combined it with trade policies that encourage raising international prices to reinvest these gains into lowering U.S. drug prices. Additionally, he imposed tariffs on pharmaceutical imports to promote domestic production, leading companies to invest in U.S. manufacturing capacity.

However, it's important to note that over 80% of generics are also imported, and they account for 90% of all prescriptions. President Trump suggested that imported pharmaceuticals could face tariffs as high as 250%.

The FDA and European Medicines Agency agree on drug safety and efficacy in the majority of cases, with agreement rates of 90% and 95% in two separate studies. This suggests that drugs that have passed the European Medicines Agency's rigorous process but not yet America's should be presumed safe and granted an accelerated approval pathway.

Trump's new FDA commissioner, Marty Makary, has expressed a desire to speed up drug approvals, including generics. This could further increase competition and potentially lower prices.

Pharmaceutical companies have been increasing direct sales outside of insurers and Pharmacy Benefits Managers, which can reduce prices, especially for those of limited means. Trump's executive order mentions the possibility of direct-to-consumer sales as a means to cut prices and increase competition.

Despite these efforts, the approval rate for novel drugs this year is down compared to both Trump's first term and Biden's term. Former Trump FDA commissioner Scott Gottlieb has warned that such measures will either raise prices or stall drug production.

Judge Glock, the Manhattan Institute's director of research and a contributing editor of City Journal, has been a vocal advocate for lower drug prices. He believes that greater competition in the ways Americans can buy drugs could help lower prices.

The low prices in other developed nations are largely due to centralized or nationalized health-care systems. However, Trump's strategy focuses on increasing competition within the current system, rather than advocating for a complete overhaul.

A photo of a prescription drug bottle is associated with this article, serving as a stark reminder of the high prices that many Americans continue to face. The fight to lower drug prices in America is far from over, but Trump's efforts represent a significant step forward in this ongoing battle.