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Tags: pharmaceutical | biopharmaceutical | mfn
OPINION

Price Controls Chill Innovation, Stifle Free Markets

effect of price controls

(Dragan Andrii/Dreamstime.com)

George Landrith By Thursday, 16 October 2025 01:36 PM EDT Current | Bio | Archive

Let's Not Make the Mistake of Importing Foreign Price Controls 

America has long been the global leader in pharmaceutical and biopharmaceutical innovation, delivering life-saving treatments and cures that have transformed modern medicine.

This leadership didn't happen by accident — it was built on a foundation of free-market principles, strong intellectual property protections, and a commitment to investing in research and development.

Yet today, that foundation is under threat from misguided policies which would import the failed socialist pricing mechanisms of other nations.

The Trump administration's recent Most Favored Nation (MFN) proposal aims to lower drug prices by tying U.S. prices to those paid in foreign countries.

While the goal of reducing costs for patients is laudable, this method is deeply flawed.

MFN policies would effectively outsource America's drug pricing to governments that routinely undervalue innovation, restrict access to new treatments, and stifle progress through bureaucratic price controls.

Let’s be clear: importing foreign price controls is not reform — it's surrender.

It's a surrender of our leadership in medical innovation, a surrender of our commitment to patient access, and a surrender of the intellectual property rights that fuel the discovery of tomorrow's cures.

In nations like Canada, the United Kingdom, and much of Europe, government-run health systems dictate the prices of medicines through centralized negotiations and rigid cost-effectiveness thresholds.

Such systems often delay or deny access to breakthrough therapies, leaving patients with fewer options and longer wait times.

The result? Lower prices, yes . . . but at the cost of innovation, investment, and lives.

America must not follow this misguided path.

We've seen what happens when governments impose artificial price ceilings: companies scale back research and development, investors pull out, and the pipeline of new treatments dries up.

In fact, many of the medicines available in the U.S. are not even offered in countries with aggressive price controls.

That's not a coincidence — it's a consequence.

Moreover, MFN policies violate the spirit of intellectual property rights by forcing companies to accept foreign-imposed prices that ignore the true value and cost of innovation.

Developing a new medicine is a risky, expensive, and time-consuming endeavor.

It can take over a decade and billions of dollars to bring a single drug to market.

Price controls send a chilling message to innovators: your work is not worth what the market says it is — it's worth what a foreign government decides.

Instead of importing failed socialist policies, we should double down on market-based solutions that promote competition, transparency, and patient choice.

Our nation's pharmaceutical industry has already taken bold steps in this direction.

This week, they announced $500 billion in new infrastructure investments, financial support for 10 million patients struggling to afford their medicines, and a new website to connect patients and businesses with direct purchase programs offered by manufacturers.

But we must also address the real drivers of high drug prices in the U.S. Pharmacy Benefit Managers (PBMs) negotiate steep discounts from manufacturers but often fail to pass those savings on to patients.

Hospitals exploit the 340B program to mark up drug prices by 700% or more.

These abusive practices inflate costs and hurt the very people the system is supposed to help. Reforming these intermediaries would do far more to lower prices than importing foreign price tags.

The Trump administration is right to call out foreign countries for free-riding on American innovation. But the solution is not to mimic their broken systems — it’s to challenge their unfair practices and strengthen our own.

We must protect the incentives that drive discovery, uphold the rights of innovators, and ensure that patients have access to the best treatments in the world.

For decades, big government has steadily inserted itself into the healthcare marketplace, layering on regulations, mandates, and price distortions that have driven up costs and reduced efficiency.

From Medicare reimbursement formulas to Medicaid price caps to the tangled web of federal oversight, Washington has often made things worse, not better.

The result is a system where middlemen profit, patients pay more, and innovators face mounting obstacles.

Free-market principles — competition, consumer choice, and transparent pricing — offer a better path forward. When companies compete to deliver value, patients win. When consumers are empowered to choose, prices fall.

And when innovators are rewarded for breakthroughs, the entire system benefits. We should be unleashing the power of the market, not shackling it with foreign-style controls.

America’s pharmaceutical and biopharmaceutical sector is one of the crown jewels of our economy and a lifeline for millions.

Let's not jeopardize it by adopting policies that have failed elsewhere.

Let's lead with innovation, not imitation.

Let's fix what's broken in our system — without breaking what works.

(Editor's Note: A related Op-ed may be found here.)

George Landrith is the President of the Frontiers of Freedom Institute and the author of "Let Freedom Ring . . . Again: Can Self-Evident Truths Save America from Further Decline?" To learn more about Frontiers of Freedom, visit www.ff.org. Read George Landrith's Reports — More Here.

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GeorgeLandrith
Instead of importing failed socialist policies, we should double down on market-based solutions that promote competition, transparency, and patient choice.
pharmaceutical, biopharmaceutical, mfn
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2025-36-16
Thursday, 16 October 2025 01:36 PM
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