The worst thing that the U.S. could do to address consumer drug costs would be to import other nations’ price control regimes.

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If the best defense is a good offense, Americans should welcome an effort underway in the United States Senate to protect lifesaving pharmaceutical innovation and target the problem of foreign freeloading.  

All too often in recent years, defenders of U.S. pharmaceutical leadership have been forced into a defensive stance, playing whack-a-mole against an incessant onslaught of bad policy proposals as they popped up.  From drug price control proposals to the Biden administration’s preposterous proposal to surrender American drug patents, bad ideas have been unrelenting.  

Those proposals created a recurring real and present danger.  

For decades, America has led the world in pharmaceutical innovation based upon our comparative system of free markets, lower taxes, less regulation and especially protection of intellectual property (IP).  No nation in human history has protected IP – patents, copyrights, trademarks and trade secrets – in the way that we have in America.  The Founding Fathers made IP protection an explicit provision in the Constitution, and for years the United States has stood atop objective rankings of worldwide IP protection.  

As a direct result of protecting IP and taking a more free-market approach than the rest of the world, no nation in human history matches our legacy of innovation.  From the telephone to the internet, from pharmaceuticals to software, from Hollywood to the music industry, from the Coca-Cola trademark to Apple’s, America stands unparalleled.  

In the realm of lifesaving pharmaceuticals, America’s leadership role is no less superlative.  

As one leading manifestation, the U.S. accounts for upwards of an astonishing two-thirds of all new drugs introduced to the world each year.  

Unfortunately, misguided activists and partisan extremists constantly target our system of IP protection and free markets that cultivated our leadership in lifesaving drug innovation.  

Beyond those domestic threats, however, American pharmaceutical leadership also created a free-rider problem vis-à-vis the rest of the world.  

Specifically, in the same way that America’s military has underwritten European security since World War II, American pharmaceutical investment and innovation has underwritten European access to lifesaving drugs created here.  American research and development makes those new lifesaving pharmaceuticals possible, but those free-riding nations impose drug price controls.  

In turn, that means U.S. consumers disproportionately pay for the R&D that goes into creating new drugs.  We end up subsidizing the worldwide pharmaceutical innovation pipeline.  

Some have responded to that free-rider problem by proposing that the U.S. simply import those nations’ price controls and begin practicing them here.  Those proposals sometimes take the form of “Most Favored Nation” (MFN) designations, which would cap U.S. drug prices at the lowest price paid among other developed nations.  Proponents believe that imposing price controls here would finally get foreign nations to begin paying their fair share for pharmaceutical R&D and manufacturing.  

The irrefutable worldwide data, however, show that drug price controls don’t limit costs, they merely make those targeted lifesaving drugs unavailable to consumers in nations that impose them.  

Accordingly, the worst thing that the U.S. could do to address consumer drug costs would be to import other nations’ price control regimes.  

That’s where a new initiative in the U.S. Senate comes in.  

Instead of playing defense against proposals like drug price controls or violation of drug patents, a group of 18 proactive Senators are going on offense.  

In a letter to the Trump administration, the Senators recognize that other developed nations benefit from U.S.-funded pharmaceutical R&D, but implement price controls that cause American patients to bear a disproportionate share of global drug innovation costs.  To address that problem, the Senators propose a deliberate effort to use trade agreements to change that:  

U.S. trade negotiations offer a valuable mechanism to address those unfair practices, which not only burden Americans, but also function as non-tariff barriers to trade. …  Consistent with this directive, it is important that Commerce and USTR engage with U.S. trading partners to negotiate binding commitments to remove these market-distorting price controls.  Currently, dozens of countries – including those with longstanding pricing policies affecting U.S. pharmaceutical products – have expressed interest or are currently undergoing tariff negotiations.  

Now is the time for Commerce and USTR to clarify top priorities, capitalize on opportunities, and resolve unfair foreign government policies in support of American workers and patients.  Given the complexity of the issues and their importance to the American public, we urge the Administration to immediately designate a senior political official at USTR to lead the effort to secure and enforce pharmaceutical pricing commitments through trade negotiations.  

In other words, just as President Trump has finally muscled Europe into boosting defense spending after decades of coasting on U.S. protection, they advocate using tough trade agreements to end decades of coasting on U.S. pharmaceutical investment and innovation.  

The Senators are correct.  It’s time to demand that Europe pay a fair share of drug innovation in the same way that they’ve finally agreed to pay for collective defense.