Thomas J. Donohue Thomas J. Donohue
Advisor and Former Chief Executive Officer, U.S. Chamber of Commerce


February 11, 2019


The U.S. is the medical innovation capital of the world. No other country compares with ours in terms of groundbreaking research, quality of care, and access to lifesaving treatments.

But a new proposal from the Department of Health and Human Services (HHS) could change all of that.

Recently, HHS proposed a plan to fix drug prices to an international standard. Doing so, the agency claims, would lower costs. In practice, however, it would reduce seniors’ access to lifesaving drugs and squelch innovation. On top of that, the importation of foreign price controls in this, or any other context, would be an assault on our free enterprise system.

For certain prescription drugs under Medicare Part B, HHS intends to dictate prices through an intrusive mechanism known as the International Pricing Index (IPI). Adopting the IPI model imports tactics used by 16 countries with government-run socialized health care – countries like the Czech Republic, Slovakia, Greece, Portugal, and Finland. In other words, the price and, therefore, access to some of the most innovative treatments would now be determined by the executive fiat of foreign governments.

By letting foreign governments set prices here in America, HHS’ new rule would suffocate innovation and preclude the discovery of lifesaving medications. To find cures, pharmaceuticals must invest billions of dollars in research and development. Businesses can usually make this money back when the drug goes to market – but they wouldn’t be able to if the federal government forced them to set prices well below market value. Companies would then have no choice but to devote fewer resources to research and development, resulting in fewer cures and fewer treatment options for the American people.

This is the great unintended consequence of the HHS proposal: It would actually limit choices and access for patients in the long run. U.S. businesses are at the forefront of pharmaceutical research, leading the world in discoveries to treat autoimmune conditions, heart disease, and cancer. But HHS’ proposal would essentially kneecap R&D efforts at our best drug companies. If the administration’s plan were put into action, we would never know how many treatments could have been discovered – or how many lives could have been saved.

In America, we don’t let the government set prices, so why in the world we would let foreign governments set prices for us? At the U.S. Chamber of Commerce, we wake up every day to fight for free enterprise, which is precisely why we oppose this proposal. Our health care system is the best in the world. Let’s keep it that way.

About the authors

Thomas J. Donohue

Thomas J. Donohue

Thomas J. Donohue is advisor and former chief executive officer of the U.S. Chamber of Commerce.

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