There's a good reason Florida pays more for prescription drugs than some other countries
A prescription drug pricing bill introduced by Florida contractors is not the right answer. Ron DeSantis' interest in importing drugs from Canada has introduced HB 1431, a so-called "reference pricing" bill that would align the price of drugs in Florida with prices in other countries that would bind countries.
Representatives Randy Fine and Ralph Massullo, MD, the bill's authors, are "America First" Republicans, meaning they defend American consumers against predatory pharmaceutical companies. But are they? Whether we like it or not, research to develop and sell drugs is an American industry.
We are without a doubt the world leader in biomedical research. You can throw a stone from my office in Boston and meet a hundred biotech and pharmaceutical companies that are critical to the region's economy. The therapies the country has developed here have transformed healthcare, with cures once thought unimaginable, and healthcare in the United States, making outpatient care ubiquitous and reducing the centrality of hospitals.
According to the World Health Organization, 168,520 clinical trials have been registered in the United States.S. Between 1999 and 2022. American research surpassed China, which ranked second with 94,193 studies.
European countries lagged far behind: Germany with 52,828 court cases and the United Kingdom with 47,201. But how is it possible that prescription drugs are cheaper in other countries when we make them here? And what is “wrong” with states setting prices at these lower prices? The answer is: Just as with defense spending, foreign nations take advantage of American investments in biomedical research and pay less than market prices.
Pharmaceutical companies can do nothing other than refuse to sell the drug in markets with low prices. This is an untenable situation for American pharmaceutical companies. Discovering cures and developing drugs involves high research and development costs and often low manufacturing costs.
Pharmaceutical companies are the opposite of automotive companies, spending less on research and development and more on vehicle manufacturing. This distinction is important. If you are the CEO of Ford and France requires you to sell F-150 pickups at a 50% discount on American prices, you will say: “Forget it, we would lose money on every truck because 75% of the cost for each. “F-Truck-150 is in production.
” Therefore, foreign nations do not take advantage of companies with high manufacturing costs. You will get a different answer from the CEO of a pharmaceutical company. If France were to demand a 50% discount, the CEO would have a difficult decision to make. The drug company may have already invested a billion dollars in developing the pill (that money is being spent), and it only costs a tenth of a cent to produce it. Are you giving up French revenues worth millions because the French are not paying a fair market price?
From a moral point of view it is important: can people in France be denied medicines because their government is exploiting them? As CEO, you have an obligation to the company, shareholders, and patients. There is no escaping these French revenues, even if prices are inevitably low.
Many nations engage in this exploitation because they know that pharmaceutical companies will not give up revenue or put up with the PR spectacle of withholding innovative medicines from patients. The real answer here is for Republicans to make leveraging American innovation a key trade issue for the White House.
In trade negotiations with other countries, we must ensure that they do not engage in unfair trade tactics and take advantage of American consumers who pay for the majority of biopharmaceutical research and development. One thing these America First Republicans shouldn't do is introduce bills to copy the freeloaders.
This will harm American industry, slow US medical research and innovation, and allow China to gain industry dominance. This is an “America Last” approach, not an “America First” approach.” William S. Smith, Ph., is a senior research scientist and director of the Life Sciences Initiative at the Pioneer Institute in Boston.
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