In an op-ed for MarketWatch, Brett Arends explains that President Trump names the wrong culprit when it comes to prescription drug prices in America. The problem is not that pharmaceutical companies are manufacturing their drugs abroad. The problem is that we let pharmaceutical companies set prices sky high, unlike every other wealthy country; Trump could end that.
Trump’s tariffs will only drive prescription drug prices higher. Pharma claims that a 25 percent tariff will increase prescription drug costs by 13 percent on average. The tariff is not going to bring drug manufacturing back to the US. Already, many drugs are manufactured in the US. But, we import a lot of the ingredients.
Older Americans will pay the lion’s share of these higher drug costs as older Americans take more drugs than other Americans. (N.B. If you travel abroad, you can save a lot of money by buying your medicines abroad. Usually, you don’t need a prescription.)
People in other wealthy countries pay far less than we do for the same drugs. And, it’s not because the drugs are being manufactured in their countries. According to RAND, a major research institution, we spend 72 percent more than Mexicans for the same prescription drugs and 129 percent more than the Canadians. We are spending around three times more for our prescriptions than the British, French, Germans and Italians and about 350% more than the Japanese.
Think about it. If you live in Western Europe or Japan, you are likely to pay a third as much as we pay for the same exact drugs. That’s insane.
The biggest reason we pay more is that other countries negotiate the price of drugs for their citizens. Our federal government does not. Our high costs are a direct result of the fact that Congress won’t require negotiated drug prices for Americans. With passage of the Inflation Reduction Act, Congress approved Medicare drug price negotiation for 10-15 drugs each year. But, President Trump has issued an executive order benefiting the pharmaceutical industry, which will reduce significantly the number of drugs for which Medicare negotiates prices.
Trump needs to sign an executive order requiring pharmaceutical companies to sell their drugs in the US for the same prices as they sell their drugs in Europe.
Here’s more from Just Care:
- Trump’s executive order on prescription drugs does not reduce drug prices
- Tariffs will likely drive drug prices higher and create drug shortages
- GAO finds US drug prices more than four times those in France
- Case study: Costco saves one couple hundreds of dollars over Medicare Part D
- Medicare Part D drug costs: What to expect in 2025
