Foreign Price Controls: A Risk to U.S. Medical Innovation and Patient Access

As policymakers consider the future of American healthcare, it is imperative to recognize the potential dangers of adopting foreign price controls for life-saving medications. These price controls, which are referred to as foreign “reference pricing,” would tie the price of medicines in the United States to prices set by foreign governments that are paid in other countries with vastly different healthcare systems. While this approach may initially sound appealing, the reality is that foreign reference pricing imports the failed models of other countries rather than rewarding innovation or recognizing the true value of breakthrough therapies. It pegs prices here to bureaucratic decisions made abroad and threatens to undermine the very engine of medical innovation that has made the United States a global leader in life sciences and benefited millions of patients.

The U.S. Chamber of Commerce has long championed free market policies—backed by strong intellectual property—that ensure equitable access to life-saving medicines while fostering a robust innovation ecosystem. However, research and experience from other countries that have implemented similar structures demonstrate that price controls, like current “negotiation” programs and those envisioned under various reference pricing schemes, have detrimental effects on patient access and the development of new treatments. If the United States imports foreign reference pricing, we will also import the negative consequences.

Price Controls Lead to Access Delays and Innovation Decline

The Chamber’s Patient Access Reports provide a stark warning. In countries that have implemented price controls, patients face significantly longer wait times and reduced access to new treatments. For instance, while 80% of new oncology products were launched in the United States, only 58% were made available in Europe, where price controls are prevalent. Patients in Germany waited an average of 133 days for access to new medicines, while those in Spain faced delays of up to 500 days. These delays are not just numbers; they represent real patients waiting for life-saving treatments, some of whom may not receive them in time.

The Biden Administration’s “negotiation program” for medicines has already set a bad precedent for government intervention in the free market. This trajectory threatens to stifle the innovation that drives the development of new treatments and cures. Our research indicates that importing foreign reference pricing will lead to a dramatic decline in U.S. clinical trial activity, with private sector research funding potentially slashed by up to 75%. This decline will disproportionately impact research into cancer and chronic diseases such as diabetes and obesity, where innovation is most urgently needed.

Moreover, the impact of price controls on research for rare diseases and orphan cures cannot be overstated. These conditions, often overlooked due to their low prevalence, rely heavily on the incentives provided by a free market to attract the necessary investment for research and development. Price controls threaten to diminish these incentives, leading to a significant reduction in the development of treatments for rare diseases. Without the promise of a return on investment, companies may abandon the pursuit of groundbreaking therapies for rare conditions, leaving patients with few, if any, options.

Focus on Real Solutions

The Chamber’s stance is clear: we support efforts to lower the price of medicines and improve patient access, but these efforts must be grounded in market-based principles that respect free enterprise and foster future medical innovation. A robust and competitive marketplace is the best way to deliver affordable and life-saving treatments to Americans.

We urge policymakers to reject all forms of price controls, but especially foreign reference pricing in U.S. healthcare. Congress and the Administration should instead focus on solutions that promote innovation and patient access. This includes enforcing existing trade agreements, negotiating new deals that create opportunities for U.S. exports, and fostering strategic collaborations with trusted trading partners. By doing so, we can ensure the United States remains a global leader in biopharmaceutical innovation while ensuring Americans can keep their access to the life-saving treatments they need.

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