A common refrain from Trump supporters is that everything he is doing is “common sense.” And at some level, they’re right. Taking aggressive measures to lower crime, strengthen the economy, and fix broken markets like pharmaceuticals sounds like exactly what a president should do.
But as Charles Sauer writes in RealClearHealth, “The problem with Trump’s policies is not that he is taking action—it’s that his approach only works in the short run. In the long run, Trump’s policies will only make all of the problems worse.”
President Trump’s latest effort, TrumpRx, aims to cut drug prices by having the government buy directly from pharmaceutical companies at “most favored nation” rates—equal to or lower than what other countries pay. It may sound like a win for consumers, but as Sauer points out, that kind of heavy-handed intervention “runs over the intellectual property rights of drug developers, harms future investment, and means fewer new drugs in the future.”
The reality is that drug prices are high not simply because of corporate greed, but because of a broken market. Patients rarely pay directly for care, middlemen extract profits, and the cost of developing and testing new drugs is enormous. As Sauer notes, by the time a company begins earning money from a new medicine, much of its patent life is already gone.
Free-market solutions already exist—Mark Cuban’s Cost Plus Drugs and the growth of Direct Primary Care are cutting costs through transparency and innovation. But as Sauer warns, “TrumpRx will suck the momentum out of this market.”
“Free market solutions produce competition, innovation, and permanently lower prices. With a government solution, we only get lower prices in the short run—but we also get fewer new drugs in the future.”
Sauer concludes that real reform should focus on empowering patients, reducing barriers to new medicines, and protecting American intellectual property abroad. That’s the kind of common sense that stands the test of time.
Read more in RealClearHealth by clicking here.
