I can’t stop thinking about Trump’s so-called “Most Favored Nation” executive order on drug prices. I know that’s kind of sad considering I’m on vacation.
Keeping it short, when Trump announced his four executive orders on drug prices at the end of July, one of them seemed to be touted as the nuclear option. Spewing the rhetoric Americans want to hear about how he is standing up to Big Pharma, Trump announced that they would get the lowest price on drugs in Medicare:
“We will determine what other medically advanced nations pay for the most expensive drugs, and instead of paying the highest price, Medicare will pay the lowest price and so will lots of other U.S. buyers.”
Somewhere along the line, that order, which oddly was the only one of four that was not made public, was referred to as Most Favored Nation (MFN). MFN is one of the core concepts of international trade agreements. It means that countries party to the agreement get the same low tariffs and other benefits as the others: better terms than those who are not party to the agreement.
He gave the pharmaceutical industry an ultimatum that this new pricing regime would come into effect by August 24, unless the industry came up with an alternative. That day has come and gone with no such action. In fact, even if the order does come into effect, or when pigs fly, it wouldn’t have a huge impact on drug prices in Medicare overall. That’s because it seems to apply only to Part B drugs in Medicare, generally ones that are administered clinically: and most drugs in Medicare are ones dispensed at pharmacies. Kaiser explains this well here.
Well, Americans—Republicans, Democrats, everything in between, and even to the right and left fringes—who buy prescription drugs at the lowest prices from other countries and import them are basically demanding Most Favored Nation rights. Or maybe we should call it Most Favored Individual (MFI). They are saying, why should I not get the best deal? With huge corporations making these drugs all over the globe, paying the lowest wages for the maximum profits, why can’t I, as a consumer, prosper from free trade in pharmaceuticals?
Glad to get that off my chest. Now I’ll get some sun and read a good book having nothing to do with drug prices, importation or international trade issues.