Posted by Michael Wonder on 21 Jul 2020
Executive order on drug price controls would backfire
21 July 2020 - Rumour has it that President Trump will soon issue a sweeping executive order to lower prescription drug prices by fiat.
Nothing is set in stone. But the order would reportedly index the government's reimbursements for medicines to the prices that Britain, France, Canada, and other developed nations pay. Since all those nations use various forms of price caps to suppress the cost of medicines, this "reference pricing" order would function as a de facto price control.
President Trump is right to think it's unfair that Americans pay more for drugs than people in other rich nations. But the order wouldn't make American patients' lives any better. Everywhere they've been tried, price controls have reduced biopharmaceutical research spending, resulting in fewer vaccines, therapeutics, and cures.
