Foreign drug imports won't lower prices for U.S. citizens

In a bid to tackle the soaring cost of prescription drugs, President Donald Trump signed an executive order, aiming to push drug companies to sell their products at the lowest prices found in other developed nations. This move is part of a broader strategy to increase competition and lower prices for American consumers.

The executive order also mentions the potential for direct-to-consumer sales as a means to lower drug prices. Moreover, it suggests accelerating the approval processes for drugs, including generics, a move that could potentially boost competition and drive prices down.

Two commissioners have been appointed to lead the Food and Drug Administration (FDA) during Trump's tenure, each with a focus on speeding up drug approvals. Dr. Robert M. Califf, who took over in 2021, and Dr. Marty Makary, currently in the role, have both expressed intentions to accelerate the approval processes for drugs, including generics.

However, the approval rate for novel drugs this year has seen a decrease, a potential challenge in implementing these speedier processes. It's worth noting that more than two-thirds of the top brand-name drugs sold in the U.S. are imported, as are over 80 percent of generics, which account for 90 percent of all prescriptions.

Greater competition in the ways Americans can buy drugs could potentially cut prices. Pharmaceutical companies have been increasing direct sales outside of insurers and Pharmacy Benefits Managers, which can reduce prices, especially for those of limited means.

The FDA and European Medicines Agency (EMA) agree on drug safety and efficacy in the majority of cases, with a study finding agreement in 90% of new approvals from 2014 to 2016. This alignment could pave the way for drugs that have passed the EMA's rigorous process but not yet America's to be granted an accelerated approval pathway.

Strengthening competition is the only real way to drive down drug prices. In Trump's first term, the FDA permitted more than 3,000 drugs, including the first generic EpiPen, saving consumers tens of billions of dollars.

However, tariffs as high as 250 percent on imported pharmaceuticals could raise prices or stall drug production, according to former Trump FDA commissioner Scott Gottlieb. The article does not provide new information about the tariffs or their potential impact on drug prices.

The low prices in foreign countries are largely due to centralized or nationalized health-care systems. Judge Glock, the Manhattan Institute's director of research and a contributing editor of City Journal, has highlighted this point.

In conclusion, Trump's executive order aims to lower drug prices by pushing for competition and direct sales, while also considering accelerated approval pathways for drugs that have already been approved in other developed nations. However, the impact of tariffs on drug prices remains uncertain.