Does anybody know if the Trump EO on instituting “most favored nation” guarantees on drugs sold in the US will affect prices in developing countries or just rich industrialized ones?
The text of the EO implies that it’s to address imbalances between the US and other developed countries (AI summary).
The Executive Order states that “Americans should not be forced to subsidize low-cost prescription drugs and biologics in other developed countries, and face overcharges for the same products in the United States.”
When describing potential importation of drugs, the order specifically mentions waivers that would be granted “to import prescription drugs on a case-by-case basis from developed nations with low-cost prescription drugs.”
The order also frames the issue as an “egregious imbalance” where the United States subsidizes drug costs in other wealthy countries, stating that Americans are “forced to pay almost three times more for the exact same medicines” compared to peer nations.
However, as stated, “most favored nation” would seem to imply that the US will only purchase drugs at the lowest prices available anywhere in the world.
Taken literally, this ~prices out poorer countries from any drugs simultaneously sold in the US and elsewhere.
To be clear, I think “MFN within “developed” countries” is still quite bad (the US has >5x the gdp per capita of the world bank cutoff for “high income countries” so in practice many people today will still be priced out, in the long run lower pharma profits → less new drug discovery → millions or more will die in the US and elsewhere from diseases like cancers and Alzheimer’s that are not preventable today). But there’s a limit to the badness if it’s just within developed countries whereas millions if not more people will die in the short term if the rest of the world is priced out of drugs if they can’t afford them at US prices.
As far as I can tell, the direct effects of the order are only about drug pricing in developed countries, despite the phrasing. The text of the executive order states (bolding added):
Sec. 5. Establishing Most-Favored-Nation Pricing. (a) Within 30 days of the date of this order, the Secretary shall, in coordination with the Assistant to the President for Domestic Policy, the Administrator for the Centers for Medicare and Medicaid Services, and other relevant executive department and agency (agency) officials, communicate most-favored-nation price targets to pharmaceutical manufacturers to bring prices for American patients in line with comparably developed nations.
The reporting I’ve seen on the EO that has said anything explicitly in either direction has also suggested that it would only apply to drug pricing in developed countries—e.g. here’s the AP:
Trump’s executive order establishes a “most favored nation” pricing model should drugmakers not voluntarily lower costs. This means that the U.S. would peg the cost of prescription drugs to the lowest prices in comparably developed countries.
Here’s a post expressing concern about the potential effects on low-income countries, which still asserts that this particular order is only about drug pricing in developed countries:
In essence, the order seeks to peg the price U.S. health plans and patients pay for a medication to the lowest price a drug company offers to countries with similar income levels or development status. [...]
Although, thankfully, the order does not apply MFN provisions against low-income countries, it could inspire other nations to adopt similar clauses, especially middle-income countries, leading to serious consequences for global health systems.
Drug prices in the US are often absurdly high and not super relevent to other Developed countries, let alone low income countries. New Zealand for example buys medications through a different system, usually far far cheaper than the US does.
And its almost an unrelated parralel drug market in places like Uganda compared with the US, with competing Indian companies competing to sell drugs here, its amazing how cheap they are here really. Some examples
Does anybody know if the Trump EO on instituting “most favored nation” guarantees on drugs sold in the US will affect prices in developing countries or just rich industrialized ones?
The text of the EO implies that it’s to address imbalances between the US and other developed countries (AI summary).
However, as stated, “most favored nation” would seem to imply that the US will only purchase drugs at the lowest prices available anywhere in the world.
Taken literally, this ~prices out poorer countries from any drugs simultaneously sold in the US and elsewhere.
To be clear, I think “MFN within “developed” countries” is still quite bad (the US has >5x the gdp per capita of the world bank cutoff for “high income countries” so in practice many people today will still be priced out, in the long run lower pharma profits → less new drug discovery → millions or more will die in the US and elsewhere from diseases like cancers and Alzheimer’s that are not preventable today). But there’s a limit to the badness if it’s just within developed countries whereas millions if not more people will die in the short term if the rest of the world is priced out of drugs if they can’t afford them at US prices.
As far as I can tell, the direct effects of the order are only about drug pricing in developed countries, despite the phrasing. The text of the executive order states (bolding added):
The reporting I’ve seen on the EO that has said anything explicitly in either direction has also suggested that it would only apply to drug pricing in developed countries—e.g. here’s the AP:
Here’s a post expressing concern about the potential effects on low-income countries, which still asserts that this particular order is only about drug pricing in developed countries:
Drug prices in the US are often absurdly high and not super relevent to other Developed countries, let alone low income countries. New Zealand for example buys medications through a different system, usually far far cheaper than the US does.
And its almost an unrelated parralel drug market in places like Uganda compared with the US, with competing Indian companies competing to sell drugs here, its amazing how cheap they are here really. Some examples
1. Amoxicillin 100 tablets 250mg $1.50
2. Doxycline 100 tablets 100mg $2.20
3. Diclofenac gel (Voltaren Gel) $0.50
4. Iv fluids 500ml (all types) $0.50
5. 1 vial of 1g Ceftriaxone (amazing broad spectrum antibiotic (0.25)
I’m not worried prices will go up here because of an odd Trump emergency order.