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President’s EOs Will Not Reduce Drug Prices

Today, Citizens Against Government Waste President Thomas A. Schatz issued the following statement today in response to President Trump signing an Executive Order (EO) that would allow importation of drugs from foreign countries and proposing an EO that would establish a most-favored-nation (MFN) pricing policy for Medicare Part B:

"The importation of drugs from other countries if they are ‘safe’ is a concept that has been around for many years. But it has never been adopted because the Food and Drug Administration (FDA) for decades has determined that the importation of pharmaceuticals would fail to keep Americans safe from dangerous counterfeit drugs. Drug importation will encourage unscrupulous characters to manufacture and distribute these illicit drugs to Americans by any means possible. The EO also ignores the fact that foreign countries, especially Canada, have no interest in supplying Americans with their drugs, citing concerns over shortages for their citizens.

"CAGW stated in its March 5, 2020 comments to the FDA regarding its proposed rule on the importation of drugs, "On May 14, 2018, Health and Human Services (HHS) Secretary Alex Azar reiterated the FDA’s opposition when he said, ‘the last four FDA commissioners have said there is no effective way to ensure drugs coming from Canada really are coming from Canada, rather than being routed from, say, a counterfeit factory in China. The United States has the safest regulatory system in the world. The last thing we need is open borders for unsafe drugs in search of savings that cannot be safely achieved. Many people may be familiar with proposals to give our seniors access to cheaper drugs by importing drugs from other countries, such as Canada. This, too, is a gimmick. It has been assessed multiple times by the Congressional Budget Office, and CBO has said it would have no meaningful effect.’ Yet today, Secretary Azar fully supported President Trump in the reversal of his strongly-held views from two years ago.

"While President Trump postponed the signing of his EO on MFN pricing until August 24, 2020, if it is signed, it would import price controls from many socialist countries and have an adverse impact on innovation and the development of new pharmaceuticals While everyone agrees that something should be done to reduce the cost of drugs, the EO is absolutely the wrong approach. And it could not have come at a worse time as pharmaceutical companies in the U.S. are leading the way to a vaccine and treatments for COVID-19.

"The EO would adopt prices utilized in a select group of countries that have government-run healthcare systems and employ price controls to keep their drug costs down. As a result, they have dramatically weakened their biopharmaceutical research and development. The EO is contrary to the conclusions of the President’s Council of Economic Advisers, who stated in their February 2020 report, ‘Funding the Global Benefits to Biopharmaceutical Innovation’ that ‘foreign "free-riding" on U.S. investments and innovation in drug development has increased over the past 15 years’ and that if ‘developed countries did not pay below the value of new products, there would be greater potential for better treatments, cures, and healthcare around the world.’ Instead, the EO would be a capitulation to those countries’ damaging policies."

Citizens Against Government Waste is the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.

View source version on businesswire.com: https://www.businesswire.com/news/home/20200724005485/en/

Contacts

Alexandra Abrams (202) 467-5310
aabrams@cagw.org