Latest news with #MostFavored
Yahoo
3 days ago
- Business
- Yahoo
Opinion - Trump shouldn't import socialist price controls
Remember when Republican presidential candidate Donald Trump castigated 'Comrade Kamala' Harris, then the Democratic nominee, for supporting price controls? It wasn't that long ago — just last August. At a campaign rally in Pennsylvania, Trump told the crowd: 'In her speech yesterday, Kamala went full Communist … She wants to destroy our country. After causing catastrophic inflation, Comrade Kamala announced that she wants to institute socialist price controls.' Harris's price controls were largely aimed at food in grocery stores, though she also frequently touted the 2022 Inflation Reduction Act's backdoor price controls — under the guise of 'negotiations' — on a certain number of expensive drugs. Trump was right to criticize Harris for supporting price controls on food, as well as prescription drugs. And, given the election results, it seems the public agreed with him. Price controls are the progressive left's go-to solution for almost all economic problems. But price controls virtually always lead to unintended consequences: shortages of the price-controlled products or services; lower quality as manufacturers cut corners to meet government-imposed price points; less innovation, since companies don't know if they'll be allowed to recover their costs; and a black market where people pay more to get what they want or need. So it's puzzling to see Trump now proposing a version of drug price controls himself. It's not the first time, either. During his first term, Trump pushed for 'drug importation,' encouraging U.S. citizens to buy medicines from countries like Canada — even though the FDA has warned those drugs could be fake or substandard. The effort fizzled, and even Florida, which tried a state-level importation scheme, eventually abandoned its program. Trump's latest idea is called 'Most Favored Nation' pricing. Details are thin, but a recent executive order says, 'To the extent consistent with law, the Secretary of Health and Human Services (Secretary) shall facilitate direct-to-consumer purchasing programs for pharmaceutical manufacturers that sell their products to American patients at the most-favored-nation price.' That 'most-favored' country will almost certainly be one with government-run health care — that is, socialized medicine. These systems are known for price controls, which lead to shortages, long wait times, and limited access to cutting-edge treatments. The goal of Most Favored Nation is to lower prices on expensive drugs. Americans do pay more for brand-name drugs than patients elsewhere. But they also pay less for generics, which account for roughly 90 percent of all prescriptions. One reason for the disparity is the middlemen in our system, known as pharmacy benefit managers. Their job is to negotiate lower prices with drugmakers. But those savings often don't make it to patients. Instead, pharmacy benefit managers keep a big chunk for themselves — on average, $0.42 of every $1 spent on brand-name drugs in the commercial market, by one estimate. In many cases, those pharmacy benefit manager cuts are larger than the total price of the drug in Europe. It's clear our system could work better. 'Shark Tank' entrepreneur Mark Cuban launched the Cost Plus Drug Company in 2022 to bypass these middlemen. The Cost Plus website says, 'Our prices are the true cost to get each medication from the manufacturer to you. We cut out the pharmacy middlemen and negotiate directly with manufacturers to get the best possible price.' The company tacks on 15 percent for overhead and a $5 filling fee. While customers may not save much on some widely used generics, the discounted prices on more expensive brand name and generic drugs are significantly lower than what most people would experience at their local pharmacy. Cost Plus has hundreds of drugs for nearly 100 listed medical conditions, and it's looking to add new drugs all the time. It's only been in business a few years and is working to expand. We also shouldn't ignore the fact that Americans are subsidizing below-market prices abroad. The United States funds a disproportionate share of global pharmaceutical innovation, while other wealthy nations impose price caps and benefit from our investment. If Trump wants to stop other countries from taking advantage of us, he should take the approach he's using to get countries to pay more for defense. Cuban's Cost Plus experiment proves we don't need Most Favored Nation pricing. Let socialized systems keep their socialized prices, limited access and denial of care. Tweaking a line Trump likes to use and applying it to prescription drugs: We don't need a new law. We just don't need a middleman. Merrill Matthews is a public policy and political analyst and the co-author of 'On the Edge: America Faces the Entitlements Cliff.' Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
The Hill
3 days ago
- Business
- The Hill
Trump shouldn't import socialist price controls
Remember when Republican presidential candidate Donald Trump castigated 'Comrade Kamala' Harris, then the Democratic nominee, for supporting price controls? It wasn't that long ago — just last August. At a campaign rally in Pennsylvania, Trump told the crowd: 'In her speech yesterday, Kamala went full Communist … She wants to destroy our country. After causing catastrophic inflation, Comrade Kamala announced that she wants to institute socialist price controls.' Harris's price controls were largely aimed at food in grocery stores, though she also frequently touted the 2022 Inflation Reduction Act's backdoor price controls — under the guise of 'negotiations' — on a certain number of expensive drugs. Trump was right to criticize Harris for supporting price controls on food, as well as prescription drugs. And, given the election results, it seems the public agreed with him. Price controls are the progressive left's go-to solution for almost all economic problems. But price controls virtually always lead to unintended consequences: shortages of the price-controlled products or services; lower quality as manufacturers cut corners to meet government-imposed price points; less innovation, since companies don't know if they'll be allowed to recover their costs; and a black market where people pay more to get what they want or need. So it's puzzling to see Trump now proposing a version of drug price controls himself. It's not the first time, either. During his first term, Trump pushed for 'drug importation,' encouraging U.S. citizens to buy medicines from countries like Canada — even though the FDA has warned those drugs could be fake or substandard. The effort fizzled, and even Florida, which tried a state-level importation scheme, eventually abandoned its program. Trump's latest idea is called 'Most Favored Nation' pricing. Details are thin, but a recent executive order says, 'To the extent consistent with law, the Secretary of Health and Human Services (Secretary) shall facilitate direct-to-consumer purchasing programs for pharmaceutical manufacturers that sell their products to American patients at the most-favored-nation price.' That 'most-favored' country will almost certainly be one with government-run health care — that is, socialized medicine. These systems are known for price controls, which lead to shortages, long wait times, and limited access to cutting-edge treatments. The goal of Most Favored Nation is to lower prices on expensive drugs. Americans do pay more for brand-name drugs than patients elsewhere. But they also pay less for generics, which account for roughly 90 percent of all prescriptions. One reason for the disparity is the middlemen in our system, known as pharmacy benefit managers. Their job is to negotiate lower prices with drugmakers. But those savings often don't make it to patients. Instead, pharmacy benefit managers keep a big chunk for themselves — on average, $0.42 of every $1 spent on brand-name drugs in the commercial market, by one estimate. In many cases, those pharmacy benefit manager cuts are larger than the total price of the drug in Europe. It's clear our system could work better. 'Shark Tank' entrepreneur Mark Cuban launched the Cost Plus Drug Company in 2022 to bypass these middlemen. The Cost Plus website says, 'Our prices are the true cost to get each medication from the manufacturer to you. We cut out the pharmacy middlemen and negotiate directly with manufacturers to get the best possible price.' The company tacks on 15 percent for overhead and a $5 filling fee. While customers may not save much on some widely used generics, the discounted prices on more expensive brand name and generic drugs are significantly lower than what most people would experience at their local pharmacy. Cost Plus has hundreds of drugs for nearly 100 listed medical conditions, and it's looking to add new drugs all the time. It's only been in business a few years and is working to expand. We also shouldn't ignore the fact that Americans are subsidizing below-market prices abroad. The United States funds a disproportionate share of global pharmaceutical innovation, while other wealthy nations impose price caps and benefit from our investment. If Trump wants to stop other countries from taking advantage of us, he should take the approach he's using to get countries to pay more for defense. Cuban's Cost Plus experiment proves we don't need Most Favored Nation pricing. Let socialized systems keep their socialized prices, limited access and denial of care. Tweaking a line Trump likes to use and applying it to prescription drugs: We don't need a new law. We just don't need a middleman. Merrill Matthews is a public policy and political analyst and the co-author of 'On the Edge: America Faces the Entitlements Cliff.'
Yahoo
14-05-2025
- Business
- Yahoo
Regeneron Upgraded as AbbVie Catches Policy Heat
Regeneron (NASDAQ:REGN) upgraded to Buy while AbbVie (NYSE:ABBV) gets downgraded as Citi flags Trump administration policy risks. Citi's Geoff Meacham says President Trump's Most Favored Nation drug-pricing order and threats to PBMs pose uneven exposure across U.S. pharma leaders. Warning! GuruFocus has detected 3 Warning Signs with REGN. Meacham argues Regeneron's Eylea franchise and melanoma pipeline optionality leave it well-positioned, raising his price target to $700 from $600 after a roughly 55% stock pullback since last year's peak. Conversely, AbbVie's beat and raise momentum is set to wane as Humira's growth slows and its late-stage pipeline lacks depth, prompting a downgrade to Neutral and a PT cut to $188 from $205. These rating shifts follow Monday's executive order tying U.S. drug prices to the lowest OECD rates and calls to curb PBM influencemoves that initially knocked down industry shares already bruised by trade-tariff talk. Meacham believes investor expectations have reset, and that positive regulatory or commercial news could spark a meaningful sentiment reversal for Regeneron. Why It Matters: With pricing reforms and PBM overhauls looming, pharma investors need to differentiate between companies that can absorb policy headwinds and those with thinner pipelines. This article first appeared on GuruFocus.
Yahoo
12-05-2025
- Business
- Yahoo
Trump's Drug Prices Executive Order Is a Big Pile of Nothing
Donald Trump is resurrecting one of his controversial first-term policies to supposedly hack prescription drug prices—but the whole effort is such a nothingburger that he very nearly forgot to sign the executive order enacting it. 'Starting today the United States will no longer subsidize the health care of other countries, that's what we were doing,' Trump said at a White House press conference Monday, referring to the European Union. He then claimed that low drug prices outside the U.S. were because the federal government had been financially offsetting would-be high prices in other countries. But that's detached from reality—the U.S. pays more for drugs because it's an outlier among high-income, first world countries, which predominantly support universal, public health coverage. Trump's first term rule—'Most Favored Nation'—was focused on lowering the cost of Medicare payments on certain drugs, but it barely made it out of the White House. The policy was blocked by federal courts shortly after it was announced in late 2020, and was then rescinded by President Joe Biden in 2021. This time around, Trump's order sets a 30-day deadline for drugmakers to negotiate lower prices. If there is no deal, then the U.S. will tie its drug prices to those paid by other countries. But as of now, nothing has changed. Trump reiterated that the U.S. would no longer 'subsidize' drug prices in other countries, telling reporters that the 'game is up' while alluding to potentially increasing auto tariffs if they don't comply. 'If they want to get cute they don't have to sell cars into the United States anymore. They won't get cute,' Trump said. 'I'll defend the drug companies from that standpoint.' He was also characteristically vague on how much prices would change. 'Drug prices will come down by much more really if you think,' Trump said. 'But between 59 and 80 and I guess even 90 percent.' 'We're getting them down 60, 70, 80, 90 percent. But actually more than that if you think about it in a way, mathematically.' Other things that researchers point to as potentially resolving high drug prices in the U.S. include restricting pharmaceutical monopolies within the country, reworking insurance benefits to restrict out-of-pocket costs, and re-centralizing price negotiations through the leverage of a single-payer system (such as Australia, Germany, the U.K., or any number of other wealthy nations), according to a report by the Commonwealth Fund, a private American foundation focused on health care reform. But none of that was on Trump's radar. Instead, the president took time out of his morning to deride Obamacare, which (as of 2024) provided public health insurance to some 45 million Americans. Trump, however, claimed that it 'doesn't work.' In a post on Truth Social Sunday, Trump pledged that the initiative would save the government trillions of dollars and falsely claimed that Democrats had stood in the way of this kind of pharmaceutical reform, ignoring the fact that health care and pharmacy drug reform has been a pillar of the progressive platform in recent years (see: Representative Alexandria Ocasio-Cortez's 'Medicare for All' 2021 revival, which would have created a single-payer system in this country.) 'Campaign Contributions can do wonders, but not with me, and not with the Republican Party. We are going to do the right thing, something that the Democrats have fought for many years,' Trump wrote. But in 2006, Republicans were the ones who adamantly stood in the way of federal drug price negotiations, ripping the teeth out of a bill that would have mandated drug companies to negotiate lower drug prices with Medicare officials. 'Instead of actually tackling the issues that concern average American families, the Republicans have passed legislation to help their wealthy friends and the huge corporations that support their campaigns,' said former North Carolina Representative G. K. Butterfield at the time before the measure passed.
India Gazette
12-05-2025
- Business
- India Gazette
India's pharma stocks show resilience to Trump's drug pricing announcement; Nifty Pharma Rebounds 1300 pts
Mumbai (Maharashtra) [India], May 12 (ANI): Pharma sector stocks in the Indian stock market showed strong resilience on Monday despite initial pressure due to the anticipated executive order by U.S. President Donald Trump aimed at cutting prescription drug prices in the United States. The Nifty Pharma index opened the day at 20,949.70 but soon dropped sharply by more than 1,300 points, touching a low of 20,600. The early decline was in line with market expectations that Indian pharmaceutical companies could come under pressure due to the U.S. move. However, as investor confidence improved following signs of mutual understanding between India and Pakistan on conflict issues, the market mood shifted. This positive sentiment helped the Nifty Pharma index rebound more than 2.5 per cent or 1300 points from its intraday low and was last seen trading flat at 21,047. Experts had predicted a challenging session for pharma stocks as President Trump was scheduled to sign a new executive order at 9 AM ET on Monday (6:30 pm Monday, Indian Standard Time). The order is aimed at reducing the prices of prescription drugs and pharmaceutical products in the U.S. by an estimated 30 to 80 per cent. Ajay Bagga, Banking and Market Expert told ANI 'The US is expected to make a formal announcement on Monday morning US time. Pharma shares will face some pressure as President Trump is expected to sign an executive order that will reduce US prices of prescription drugs and pharmaceuticals by an expected 30 to 80 per cent at 9 AM ET on Monday'. Under the new 'Most Favored Nation' (MFN) pricing rule, the U.S. will align its drug prices with the lowest prices available in other countries. This measure is expected to bring immediate cost relief for American patients but could have global implications for the pharmaceutical sector. Industry watchers like GTRI believe the MFN pricing rule may lead to a global price correction. Pharmaceutical companies might intensify efforts to push for higher drug prices in low-cost markets such as India. This could be done by urging changes in India's patent laws through international trade talks, potentially increasing drug prices in the Indian market in the long term. Despite these concerns, the strong recovery in the Nifty Pharma index reflects investor confidence in the Indian pharma sector's ability to withstand external pressures and adjust to global regulatory changes. (ANI)
