President Trump thinks Americans pay too much for prescription drugs -- and says foreign countries are to blame. In a speech, he criticized nations that use socialist price controls to artificially hold down the cost of pharmaceuticals. "For decades," he noted, "other countries have rigged the system so that American patients are charged much more . . . for the exact same drug."
The president's criticism is spot on. That's why a new initiative from his Department of Health and Human Services is so shocking. HHS Secretary Alex Azar just proposed a major overhaul of Medicare that would impose those socialist price controls here in the United States.
Instead of putting America first and forcing other countries to play by the rules, the proposal legitimizes foreign freeloading. The price controls would limit seniors' access to lifesaving drugs and chill pharmaceutical research efforts.
President Trump correctly notes that prescription drugs are more expensive in America. The reason for the price disparity is simple. Nations with socialized medicine, including Canada, the United Kingdom, and France, cap prescription prices. If a drug is too expensive, the government won't offer it to patients.
Once drug companies have developed a medicine, they have a limited amount of time to sell it and recoup their costs before the patent expires. So it makes sense for American drug companies to market their products in price-controlled nations, even if that means granting steep discounts. The alternative is earning no foreign revenue at all.
As a result, American patients fund the lion's share of global research and development costs. The HHS proposal wouldn't rectify this injustice -- it would only further harm American patients.
Right now, Medicare drug payments are based on each medicine's average domestic sales price. Sec. Azar wants to instead index Medicare payments to the average prices paid in 14 other countries.
Copying other nation's socialist price controls would reduce American patients' access to the latest medicines.
Consider treatments for respiratory conditions. All new respiratory drugs released globally in the last seven years are available to Americans. Patients in Japan and France -- two of the reference countries included in Sec. Azar's pricing index -- can only access 55 percent of those medicines.
Domestic price controls would also smother drug innovation, depriving future patients of potentially lifesaving cures.
Europe is a cautionary tale. The region led the world in biopharmaceutical R&D investment in the 1980s. But once several nations adopted price control policies, Europe suffered a dramatic decline in research investment. Today, the United States spends 40 percent more on biopharmaceutical R&D than Europe.
Sec. Azar's proposal would reward the forces of socialism abroad and threaten American ingenuity and prosperity at home. Patients can only hope that President Trump orders his HHS secretary to scrap the plan.
Stacy Washington is a decorated Air Force Veteran, an Emmy nominated TV personality, and the host of the nationally syndicated radio program "Stacy on the Right."
