Stop Germany, Japan Free-Riding On U.S. Drug Innovation | Opinion
Summary
President Donald Trump has warned Germany and Japan to change their practices of controlling drug prices, which he says unfairly shift the costs of new medicine development onto American patients and companies. The U.S. recently made a deal with the United Kingdom to pay more for medicines but plans to investigate Germany and Japan if they do not change their policies.Key Facts
- Germany and Japan use government price controls to keep payments for new U.S. drugs low.
- Germany sets drug prices based on whether a medicine offers an added benefit compared to older treatments, often lowering prices.
- Japan lowers prices on innovative drugs every year, even during patent protection, sometimes by up to 50%.
- These pricing methods reduce profits for U.S. drug companies and shift the cost of research onto Americans.
- Biopharmaceutical companies earn around 75% of their global profits in the U.S., despite it being only 25% of the world economy.
- President Trump’s administration made a deal with the U.K. to increase drug spending and reduce rebate policies.
- Germany is moving forward with stricter drug price rules that include more rebates and limits on innovation payments.
- Japan is also planning tighter price controls and more frequent price cuts on innovative medicines.
- The U.S. is threatening formal trade investigations if Germany and Japan do not change their drug pricing policies.
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