For months, the Trump administration has floated the idea of a formal investigation into foreign countries' unfair drug pricing practices -- an implicit threat intended to push our allies into proactively reforming those practices, without the need for overt pressure. But those allies haven't taken the hint. They're still continuing their decades-long mistreatment of American biotech companies and their millions of workers.
It's time to launch the investigation. Doing so would unlock a broader range of enforcement tools -- and give President Trump more leverage to lower prescription drug prices at home by ending foreign governments' freeloading for good.
Nearly all of America's trading partners use a variety of price controls and non-tariff trade barriers, such as deliberate bureaucratic delays and not-so-subtle threats to invalidate American companies' patent protections, to artificially suppress their spending on American-designed, American-made medicines.
Consider how multiple European Union members, as well as the United Kingdom, routinely impose mandatory rebates and revenue clawbacks to cap spending on new medicines. Countries such as Germany and France restrict coverage for more than half of newly-approved medicines by declaring they offer "no added benefit." Even when the European Medicines Agency -- the continental counterpart to the FDA -- approves new medicines for sale, European nations' government-run health systems frequently drag out coverage decisions for up to 700 days.
In other words, EU members block their citizens from accessing the latest medicines in practice, even if those drugs are "approved" in theory.
Outside Europe, the picture is no better. South Korea has not updated the cost-effectiveness threshold that bureaucrats use to set prices on new medicines since 2007, and the average delay between regulatory approval and insurance reimbursement decisions is nearly two years. In Japan, the government-run health system subjects even the most clinically effective patented drugs to annual price cuts.
All these practices disproportionately shift the burden of paying for the ludicrously expensive research and development needed to produce new drugs onto Americans. Drug companies earn about 75% of their global profits in the U.S. market, even though the United States accounts for only a quarter of the global economy.
President Trump is not the first to point out this imbalance. But he is the first to take meaningful steps to address it.
In December 2025, the administration announced a landmark deal with the United Kingdom. In order to avoid President Trump's threatened tariffs, UK officials agreed to raise the cost-effectiveness threshold they use when determining which new medicines to cover, reduce revenue clawbacks, and double spending on pharmaceuticals over the next decade.
The agreement will ensure that one of our wealthiest trading partners contributes its fair share toward the global R&D burden. That will relieve American patients and taxpayers while increasing American biotech companies' revenues by billions of dollars, spurring domestic research and manufacturing and creating new jobs at home.
Top administration officials, especially U.S. Trade Representative Jamieson Greer, have promised more such deals in the near future. But securing them will require substantial leverage.
A formal Section 301 investigation into foreign drug pricing practices would be enormously helpful. If such an investigation concluded that foreign governments are systematically underpaying for American-made medicines, it would empower officials to use targeted enforcement actions, such as tariffs, to bring trading partners to the negotiating table.
Successful negotiations would vastly improve the physical and financial health of patients and workers.
And that would be a far better solution than the alternative proposal that some Washington lawmakers are considering: mandating that all drugmakers sell their products at the same artificially low prices that foreign countries currently pay.
Importing these foreign price controls would dramatically weaken America's negotiating position. Foreign governments could refuse President Trump and Ambassador Greer's demands -- and then watch as Congress' policy automatically brings U.S. prices down to other countries' artificially low floor, rather than bringing other countries up towards America's standard. That'd crater domestic research and manufacturing investments.
Our trading partners have gotten away with freeloading for too long. By launching a Section 301 investigation into these longstanding abuses, administration officials can give President Trump the leverage he needs to end foreign freeriding once and for all.
Ambassador Jeffrey Gerrish served as the Deputy U.S. Trade Representative for Asia, Europe, the Middle East, and Industrial Competitiveness from 2018 to 2020.
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