New Drug Pricing Executive Order Burdens Patients

President Trump just signed an executive order designed to reduce drug prices. Dubbed a “Most Favored Nations” policy, the order pegs Medicare payments for medicines to the prices paid by foreign governments.

This plan would reduce access to today’s innovative medicines and stifle medical progress. It must be shelved. There are much better ideas for reducing prescription drug costs.

Many foreign nations have single payer health systems that impose strict price controls on new medicines and refuse to cover particularly expensive drugs.

Patients living in those nations end up with fewer treatment options. Patients in the United Kingdom and France had access to just seven in 10 new cancer therapies between 2011 and 2018. American patients could access to virtually all of them.

The U.S. market operates differently. Insurers compete for patients often by offering generous drug coverage. Drug researchers are incentivized to develop new treatments, as they know that American patients value innovation. As a result, research companies across the world generally launch their newest drugs here first.

The executive order will slow medical progress. There are currently 4,500 drugs in America’s development pipeline. These medicines target everything from cancer and HIV to heart disease and asthma. Price controls would inevitably reduce drug firms’ revenues and leave them less to invest in research and development. This could block the next generation of drugs from ever even hitting the pharmacy shelf.

Medical breakthroughs are constantly making it easier and cheaper for patients to stay healthy. A recent study from my organization, the Partnership to Fight Chronic Disease, found that new medicines could avoid $6 trillion in healthcare costs and prevent 16 million deaths by 2030.

It isn’t fair that Americans pay so much more than Canadians and Europeans. But policymakers should work to get these nations to shoulder more of the research burden not import their harmful policies. Kenneth E. Thorpe is a professor of health policy at Emory University and chairman of the Partnership to Fight Chronic Disease. This piece originally ran in the Pittsburgh Post-Gazette.

American innovation helps patients beat coronavirus

American scientists are working furiously to develop treatments for the novel coronavirus, COVID-19.

No group of patients needs a vaccine more than those with chronic conditions.

Patients with just one chronic disease who contract COVID-19 are 80 percent more likely to experience a “poor outcome”— like hospitalization or death— than those without any chronic conditions, according to recent studies.

Fortunately for Americans living with chronic disease, the United States leads the world in medical innovation. As long as policymakers protect this innovation ecosystem, U.S. scientists will surely produce vaccines and treatments relatively quickly— and keep our nation healthy through this crisis and for years to come.

Americans are rightly worried about COVID-19. More than 100,000 Americans have died from COVID-19 and nearly two million have tested positive for the disease.

Patients with chronic diseases are particularly vulnerable. Forty percent of hospitalized COVID-19 patients have some type of cardiovascular or cerebrovascular disease. Other chronic conditions— like arthritis, diabetes and cancer— could make it harder for the body to fight the virus.

But our scientists will rise to this challenge and invent new therapies, just as they have countless times in the past. Heart disease death rates have declined 36 percent since 2000, largely thanks to new and better medicines. Similarly, cancer death rates have declined 27 percent since the 1990s.

Health gains like this come at a hefty price. It takes up to 15 years and $2.6 billion to develop just one new medicine. And only 12 percent of drugs that begin clinical trials ever make it to pharmacy shelves. Drug companies and their investors will only roll the dice on novel research projects if they have a chance of recouping their development losses and earning a return.

Because the United States fairly values medicines, scientists have a strong incentive to launch research projects here. All told, American firms develop half of the world’s new medicines.

Researchers tend to flee countries whose governments arbitrarily cap prices of new medicines. Consider that in the 1970s, Europe produced more than half of the world’s new medicines. But throughout the 1980s, many European countries imposed increasingly strict price controls on drugs. As a result, today Europe produces only 33 percent of all new drugs.

Unfortunately, some lawmakers want to implement similar price controls in the United States. A few members of Congress attempted to slip a price control into one of the first COVID-19 spending packages. The provision would have allowed the government to dictate the price of any COVID-19 vaccine that resulted from the emergency funding.

Congress wisely stripped out that provision, which would have discouraged investments into COVID-19 cures, vaccines, and therapies. Congress’ decision is great news for every American hoping for a COVID-19 vaccine, especially those living with chronic disease.

COVID-19 poses an enormous threat to American society — but our smartest scientists are already on the case. Let’s hope our policymakers don’t put any stumbling blocks along their path to a cure— whether for coronavirus or any other dangerous disease.

Kenneth E. Thorpe is a professor of health policy at Emory University and chairman of the Partnership to Fight Chronic Disease