By Jon Decker
This week the U.S. and Canada are set to square off in another round of trade negotiations for “NAFTA 2.0.” Amid this week of heavy back-and-forth, one exciting opportunity presents itself that has largely flown under the radar – President Trump’s new trade agreement could prove to be life-saving.
The Trump administration is taking a serious look at how to lower drug costs and increase innovation through trade policy. Many of our trading partners impose draconian prescription drug price controls and use other regulatory means to undermine the value of American drug patents.
This forces Americans to shoulder the research and development costs for new drugs, as we are the only significant market that doesn’t impose similar price controls. The foreign drug price controls are set above the marginal cost of manufacturing pills, but nowhere near the total costs associated with bringing a new drug to market. These protectionist policies are a significant reason why it takes a staggering $2.6 billion to bring a new drug to market. This cost falls overwhelmingly on Americans.
A new report from Committee to Unleash Prosperity founders Stephen Moore and Steve Forbes reveals how foreign price controls stifle life-saving innovations.
The Committee to Unleash Prosperity stated:
“If OECD countries lifted price controls altogether, the study estimated the resulting increase in pharmaceutical R&D investment would yield eight to 13 new drugs per year through 2030, increasing the average life expectancy of a 15-yearold individual living in the U.S. today by 1.1 to 1.6 years (while adding 0.6 to 0.9 years to the life expectancy of a 45-year-old). The benefits aren’t limited to the U.S., as eliminating price controls would also result in substantial gains in longevity in other countries as well. The potential economic gains from increasing longevity run into the trillions of dollars worldwide.”
The Committee to Unleash Prosperity’s study gives important insight on the consequences of foreign drug price controls. The study shows that President Trump has real potential to alleviate suffering and save lives by negotiating a trade deal that forces other countries to pay their fair share of the research and development of new drugs. Reducing protectionist policies that impact drug prices would save lives both at home and abroad, and it is in all nations’ best interest to pursue policies with the potential to save lives.
If President Trump’s new trade agreement allows people to live longer, healthier lives, that sounds like a “better deal” to me.
By Jon Decker