Debbie Hart, president and CEO of BioNJ, the life sciences trade association for New Jersey, objected to President Donald J. Trump’s plan to cut drug prices in the United States by tying some pharmaceuticals in this country to lower prices in other countries. The president signed an executive order to pursue this effort, known as the “most favored nation” policy.
Lowering the cost of drugs that Americans pay to a level that other nations pay has long been an issue that’s largely been championed by Democratic politicians. Trump is trying to at least gain parity with medicine costs in other, mostly developed countries that have national health care whose governments can exercise buying power to force down prices.
“BioNJ is deeply concerned about the Most Favored Nation Executive Order issued by President Trump today,” said Hart in a statement. “This concept, which intends to link prescription drug prices that are paid in the United States, to those in other nations, is a deeply flawed attempt to enable the government to control prices which economic assessments have shown will not only decimate innovation in the life sciences — but will also essentially mimic policymaking in nations that generate a fraction of the diversity of treatments and cures that American companies have been able to bring to Patients.”
During a press conference on Monday, Trump said, “Basically, what we’re doing is equalizing. We are going to pay the lowest price there is in the world. We will get whoever is paying the lowest price, that’s the price that we’re going to get.”
White House officials did not say which drugs the order will apply to, but said the action will impact the commercial market as well as Medicare and Medicaid. U.S. prescription drug prices are two to three times higher on average than those in other developed nations, according to some estimates.
“New Jersey is home to one of the most productive centers of biomedical innovation in the world,” continued Hart. “We are tremendously proud that our State produces so many new and effective medications for Patients globally. I’m very hopeful that policymakers in D.C. will appreciate that the implementation of a policy concept like this would not only inhibit our state’s ability to innovate — it will mean that Patients will have access to fewer new treatments and cures.”
According to industry group PhRMA, it takes 10-15 years on average to develop one medicine from initial discovery through regulatory approval. Estimates for the average cost of creating a new medication range as high as $2.6 billion, though costs will vary widely depending on the type of drug. A paper published in JAMA in March 2020 puts the estimate at $985 million, though that research relied on publicly available data which was mostly gathered from smaller firms. Drug development costs include expenditures on failed trials.
New Jersey is home to eight of the top 10 global biopharmaceutical companies, eight of the top 10 R&D companies, and more than 5,600 life-sciences establishments.
Hart concluded by saying, “As we have over the past few weeks, BioNJ will continue to connect with members of multiple state congressional delegations to convey why this is misguided policy making and how it will fail to redound to the benefit of anyone other than our nation’s economic competitors who are aggressively pursuing policies to foster innovation in their own life sciences sector rather than inhibit it.”
BioNJ said on its website that it represents 450 research-based life sciences organizations across the healthcare ecosystem from the largest biopharmaceutical companies to early-stage start-ups.
