In a recent RealClearMarkets column, Charles Sauer examines the growing push to impose “most favored nation” (MFN) drug pricing through legislation expanding access to home infusion therapy—and explains why importing foreign-style price controls would ultimately hurt patients, not help them.
Home infusion therapy allows millions of Americans with cancer, heart disease, and other serious illnesses to receive intravenous treatments at home rather than in hospitals. As Sauer explains, this approach improves patient quality of life, reduces infection risk, and is dramatically more cost-effective than hospital-administered care. But election-year politics are now threatening to undermine these gains.
“Home infusion therapy improves patients’ quality of life—and can be as much as 12 to 24 times cheaper than hospital-administered treatments.”
During a markup of the Joe Fiandra Access to Home Infusion Act, lawmakers proposed capping drug prices at the lowest levels paid in foreign countries—a version of MFN pricing modeled on earlier Trump-era proposals. While the concern about high drug prices is understandable, Sauer argues that MFN pricing fails to address the real causes of high costs and instead introduces new risks.
“MFN pricing not only fails to solve the problem of high drug prices—it creates a new set of problems.”
One major flaw is that pharmaceutical companies can simply stop selling drugs in countries with strict price controls or use opaque rebate systems that distort international price comparisons. More importantly, MFN pricing would deprive American patients of one of the biggest advantages they currently enjoy: early access to new medicines.
“As the world’s largest pharmaceutical market, America often recoups higher costs in the form of longer and healthier lives.”
Sauer also points to warnings from budget analysts that price controls reduce investment in research and development, leading to fewer new drugs over time—an outcome that would be especially devastating for patients relying on cutting-edge therapies.
“In the long term, reductions in manufacturer revenues mean less spending on research and development—and fewer new drugs.”
Rather than importing foreign price controls, Sauer argues policymakers should focus on policies that actually reduce costs without sacrificing innovation—such as promoting generics, streamlining regulation, and lowering the cost of bringing new drugs to market.
“Price controls are not the way to make America great—or healthy—again.”
The full column by Charles Sauer originally appeared in RealClearMarkets.
