This op-ed originally appeared in the Charleston Gazette-Mail.
While the United States continues to dominate Iran militarily, that hasn’t stopped Americans from feeling the squeeze at home.
Tehran’s efforts to disrupt roughly one-fifth of the world’s oil supply have contributed to higher prices at the fuel pump. Now, those same cost pressures are beginning to bleed into essential medicines. Drugs that rely on petrochemicals — key building blocks derived from oil — are the next victim in the supply chain squeeze.
Some economic strain is unavoidable, given Iran’s strategic positioning on key global trade routes. But Washington shouldn’t add fuel to the fire. One health care proposal gaining steam would amount to death by a thousand cuts for America’s biotech industry.
The policy in question — Most Favored Nation pricing — would shackle U.S. prescription drug prices to artificially low rates set by foreign governments propped up by socialized health care. It’s a dangerous detour for an administration committed to producing more “Made in America” medicines.
To be clear, Americans are right to be frustrated by the high cost of prescription drugs — especially middle-class families and seniors living on fixed incomes. But those prices are often driven less by manufacturers and more by the complex web of pharmacy benefit managers and insurance policies that inflate costs behind the scenes.
Most Favored Nation pricing will only make these problems worse.
That’s because pegging American drug prices to government-set rates abroad would gut incentives to develop pharmaceuticals on our soil. As the U.S. Chamber of Commerce previously warned, manufacturers would be forced to scale back research and development and cut clinical trial activity. Fewer dollars in means fewer drugs out.
This isn’t theoretical. Europe has already fallen victim to this practice. Medicine price caps there have slowed the rollout of new treatments and chilled investment in pharmaceutical research. The result? Fewer innovations reaching patients — and often later.
Under the previous administration, the United States experienced some of these consequences firsthand. President Joe Biden’s misnamed Inflation Reduction Act introduced Medicare price controls in 2022. The results have been predictable. Dozens of research programs have been scrapped, while more than 25 drugs have been discontinued altogether.
With China continuing to increase its share of global drug development, the United States can’t afford to kneecap innovation. Washington should instead focus on strengthening our nation’s ability to produce cutting-edge medicines. That means building on policies that encourage investment, accelerate production and expand domestic manufacturing.
Some of that work is already underway. Tax legislation passed last July lets drug manufacturers immediately expense some domestic research and development costs, encouraging greater investment in American science. Additional White House directives that tear down barriers to U.S. pharmaceutical production are giving those incentives extra teeth.
But the job is far from over. Further slashing regulatory red tape and reducing cost barriers will drive more drug manufacturing back to the United States. Many regions already have the base to support it; they just need Washington to grease the wheels.
States like Pennsylvania, Ohio, North Carolina and Indiana possess the workforce, infrastructure and industry presence to supercharge domestic pharmaceutical manufacturing. Major health care companies, like Johnson & Johnson, Amgen and Novartis, have planted deep roots in these regions because of their proven capabilities.
Beyond the mainland, the U.S. territory of Puerto Rico offers another feather in America’s medical innovation cap. The island boasts the second-largest pharmaceutical manufacturing output in the United States and produces seven of the 10 best-selling drugs.
Regardless of where investment flows, incentivizing drug production on American soil gives innovators the freedom to find the next breakthrough, and the ability to recoup the cost of getting there. Anti-free market price controls would strip that away, handing foreign governments more leverage while leaving American patients with fewer options. It’s a policy best left on the shelf.
Dr. Chris Stansbury is a partner at West Virginia Eye Consultants and is a former Republican member of the West Virginia House of Delegates.