Trump Must Challenge Foreign Freeloading, Not Copy It

The issue of foreign freeloading on American pharmaceutical innovation has been a longstanding concern. The America First Policy Institute recently released an issue brief highlighting the detrimental impact of other countries benefiting from American drug research and development without contributing their fair share. This practice results in American consumers bearing a disproportionate burden of the global costs associated with drug development.

President Trump has already taken steps to address similar freeloading issues in other areas, such as calling on European NATO allies to contribute more to collective defense. It is crucial that the same firm approach be applied to pharmaceutical pricing.

While the analysis presented by AFPI accurately identifies the problem of foreign freeloading, their proposed solution of implementing a “most-favored-nation” pricing policy is deemed misguided. This approach would set drug prices in Medicare based on the lowest prices paid in countries like Canada, the United Kingdom, and France.

The complexities of pharmaceutical pricing overseas, particularly in European countries, must be taken into account. These nations often use aggressive government-backed negotiations to secure significant discounts from drug manufacturers, sometimes resorting to threats such as revoking patents under international conventions.

Implementing an MFN policy would likely not address the issue of freeloading and could potentially worsen the situation by importing Europe’s price controls into the American healthcare system. This could jeopardize America’s global leadership in pharmaceutical innovation, as developing a new drug is a costly and time-consuming process with no guarantee of success.

Research has shown that reducing U.S. pharmaceutical prices could lead to a significant reduction in research initiatives, potentially hindering the development of new medicines. Lowering American prices to match artificially low prices in Europe could intensify global freeloading and shift medical innovation leadership from the U.S. to countries like China.

Instead of resorting to price controls, the Trump administration should utilize trade tools and diplomatic strategies to compel foreign governments to pay fair prices for American-developed medicines. By directly confronting foreign governments on this issue, the U.S. can protect its innovation, ensure patient access to groundbreaking treatments, and maintain its leadership in medical research.

In conclusion, it is essential to address foreign freeloading on American pharmaceutical innovation through direct engagement with foreign governments rather than implementing misguided pricing policies. This approach will safeguard American innovation, patient access to vital treatments, and the country’s position as a leader in medical research.