President Donald Trump and Secretary of Health and Human
Services Alex Azar presented on 11 May 2018 a medicine pricing plan
entitled "American Patients First - The Trump Administration
Blueprint to Lower Drug Prices and Reduce Out-of-Pocket
Costs". APF obviously focuses on the complexity and
idiosyncrasies of the US medicine markets and regulations and is
designed to make its impact felt there. Still, some of the measures
that will be implemented or studied sound familiar from an
international perspective. Examples are measures to promote the
uptake of biosimilars and indication-based pricing.
Of immediate relevance for third countries is the APF's assault
against "foreign governments' free-riding off American
investment in innovation". According to APF, which seems
to focus first and foremost on Europe, budget controls have created
excessive constraints on government spending on prescription
medicines. Additionally, external reference pricing "combined
with the threat of market lockout or intellectual property
infringement, prevents drug companies from charging market rates
for their products, while delaying the availability of new cures to
patients living in countries implementing these
policies." As a result, APF maintains that European
countries (or, more generally, OECD countries) have not contributed
an "appropriate share" to the research and development
costs of medicines conceived in the US. They have rather been
"free-riding off US consumers and taxpayers".
Despite its muscular analysis, the heading "fixing global
freeloading" of the APF does not so much cover a list of
measures ready to be implemented against foreign governments or
entities, but rather a few avenues of thought that invite further
exploring. The APF raises the following questions:
- What can be done to reduce the pricing disparity and spread the burden for incentivising new drug development more equally between the US and other developed countries?
- What policies should the US government pursue in order to protect IP rights and address concerns around compulsory licensing in this area?
It would not be wise to dismiss the international part of the APF as a form of consequence-free pandering to a domestic audience. The United States, including previous administrations, has always been critical of budget-inspired European medicine reimbursement measures if they were judged to lack transparency, reflect arbitrariness, stifle innovation and/or erode intellectual property. For example, as recently as March 2018, the United States Trade Representative ("USTR") expressed concern over European Union pharmaceutical policies in its 2018 National Trade Estimate Report on Foreign Trade Barriers. According to USTR, "US pharmaceutical stakeholders have expressed concerns regarding several Member State policies affecting market access for pharmaceutical products, including non-transparent procedures and a lack of meaningful stakeholder input into policies related to pricing and reimbursement, such as therapeutic reference pricing and other price controls. Such policies reportedly create uncertainty and unpredictability for investment in these markets and can undermine incentives to market and innovate further". USTR went on to criticise a range of individual Member States, including Austria, Belgium, Cyprus, the Czech Republic, France, Hungary, Italy, Lithuania, Poland, Portugal, Romania, and Slovakia. It is conceivable that, based on the analysis contained in APF, the US will no longer target European medicine pricing policies which it considers illegitimate through diplomacy only, but may also seek to deploy international trade measures.
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