A coalition of more than 50 leaders of conservative and free-market organizations signed a letter to members of Congress on Thursday, opposing codifying President Trump’s “most favored nation” (MFN) drug pricing policy model into law.
The letter, which argues an MFN pricing law would “import socialist price controls and values into our country,” highlights the growing tension between Trump and a portion of the conservative movement.
“In addition to doing nothing to address foreign freeloading, MFN would reduce access to new cures and reduce U.S. global competitiveness, ceding ground to China,” the leaders wrote.
“While supporters of this proposal correctly identify the unique problems facing the American health care system — namely, wealthy countries paying artificially lower prices for prescription drugs than the U.S. and the fact that this depresses innovation and inflates our costs — MFN would not solve these problems,” the letter continues. “In fact, it would exacerbate them.”
Signatories of the letter include Grover Norquist, president of Americans for Tax Reform; Stephen Moore, co-founder of Unleash Prosperity Now and a former economic adviser to Trump; Tim Chapman, president of Advancing American Freedom; Phil Kerpen, president of American Commitment; Ryan Ellis, president of Center for a Free Economy; Alfredo Ortiz, CEO of the Job Creators Network; Morton Blackwell, a Virginia Republican National Committee member; Emily Stack, executive director of Moms for America Action; Pete Sepp, president of National Taxpayers Union; and David Williams, president of Taxpayers Protection Alliance.
The president’s MFN executive order directs his administration to negotiate agreements with drug companies to lower the prices of certain prescription drugs to the lowest price they are sold globally in other countries. The Trump administration has struck “most favored nation” deals with 16 pharmaceutical companies.
The president has called for Congress to codify the policy into law. A bipartisan group of lawmakers in the House — Reps. Ro Khanna (D-Calif.), Rep. Anna Paulina Luna (R-Fla.), Marcy Kaptur (D-Ohio), and Andy Biggs (R-Ariz.) introduced one such bill to codify the order’s provisions last year.
The letter to lawmakers argued that a belief that MFN drug pricing would incentivize manufacturers to negotiate better deals is “based on the flawed assumption that American manufacturers are not already fighting as hard as they can against foreign price controls.”
The signatories argue there could be unintended negative consequences from the price controls.
“If the U.S. implements the same price controls utilized by foreign countries, companies cannot expect to recuperate the R&D [research and development] costs for the medicines they create,” they wrote. “This will depress innovation and reduce cures available to patients while causing an unacceptable degree of drug shortages.”
MFN drug pricing is not the only policy of Trump’s that has given many outside conservative and free-market organizations heartburn. The movement activists have also been nervous about Trump’s moves such as taking an equity stake in Intel and the president’s embrace of broad global tariffs.