Most Favored Nation Is a Most Flawed Notion

Last November, American voters overwhelmingly sent the GOP to Washington, D.C., to Make Government Small Again.

So, why are Republicans importing socialist drug prices from foreign, single-payer, medical bureaucracies?

This, alas, is exactly what President Donald Trump did on Monday, with a stroke of the First Sharpie. His executive order ties U.S. pharmaceutical costs to the fake rates imposed by statist health schemes overseas.

Dr. Trump correctly diagnoses this disease. His order directs the federal government to “ensure foreign countries are not engaged in any act, policy, or practice that may be unreasonable or discriminatory … and that has the effect of forcing American patients to pay for a disproportionate amount of global pharmaceutical research and development, including by suppressing the price of pharmaceutical products below fair market value.”

Unfortunately, rather than aim strong medicine at these foreign freeloaders, Dr. Trump prescribes friendly fire for U.S. drug companies. Their bottom lines will grow jaundiced by making them charge at home the same bargain-basement prices inflicted on them by the same overseas medicrats who rip them off in the first place.

This ugly policy has a sexy name: Most Favored Nation. To the untrained ear, this sounds like the greatest diplomatic achievement since the Treaty of Paris shielded the fledgling United States from Great Britain.

Health care scholar Sally Pipes has a much more accurate title for this concept: Most Flawed Notion.

“Let’s be clear: [Most Favored Nation] is price fixing,” Pipes wrote in a May 3 article at Forbes.com. The president of the California-based Pacific Research Institute added: “It is not market reform. It is not a tough negotiating tactic. Republicans who fall for this scheme are abandoning any pretense of free-market principles.”

In essence, Most Favored Nation takes the lower pharmaceutical prices in socialized medicine monopolies (e.g. the British National Health Service’s $1,000 per injection of Eyelea, an age-related macular-degeneration drug, vs. $1,850 per U.S. dose) and heaves them on America. “Countries like France and the UK don’t ‘negotiate’ prices—they dictate them,” Pipes explained. “When manufacturers refuse, they are locked out of the market entirely and risk patent theft through compulsory licensing.”

Republicans should know better than to embrace a policy perpetrated by blackmailing, swindling parasites.

Few things are more demoralizing than watching Republicans impersonate Democrats. If the American people want to inflict price controls on a thriving industry, they should elect Democrats who are naturally wired to do so.  

Most Favored Nation could make pharmaceutical revenues collapse—thanks to government-driven, uneconomical prices. Consequently, Eli Lilly, Johnson & Johnson, Merck, Pfizer, and other drug companies surely would invest fewer dollars in critical, high-cost research and development. Each new medication typically requires $2.6 billion largely due to using the 8% of potential drugs that eventually reach patients to underwrite the 92% that fail in clinical trials.

Most Favored Nation’s War on R&D would mean fewer remedies and therapies. This is perfect for an aging, ailing nation in which 10,000 new baby boomers turn 65 and qualify for Medicare every day.  

Rather than launch Republican price controls, Trump should use today’s tariff and trade negotiations to hammer the National Health Service and other Obamacare-style systems overseas that force American drug companies to sell their drugs at artificially low prices and squeeze the difference out of U.S. patients and insurers.

Trump, who is not shy about such things, should shift the burden from sick Americans onto international pharmocrats. He should tell them to pay their fair share for U.S. pharmaceuticals.

The message should be as tough, blunt, and America First as Trump himself: 

If you want U.S. drugs, pay U.S. prices.

Republicans also should save taxpayer dollars by reforming Medicaid without cutting benefits to those it is designed to assist; specifically, pregnant women, poor children, low-income seniors, and the disabled.

First, catapult each and every illegal alien off Medicaid. America owes these foreign invaders absolutely nothing. Coupled with stricter eligibility verification, the Foundation for Government Accountability estimates that these steps could save $282 billion over 10 years. Among voters, 78% support this idea.

Second, vanquish Medicaid fraud. The U.S. Government Accountability Office (GAO not FGA) reported last month that improper Medicaid payments in fiscal year 2024 totaled $31.1 billion, or $311 billion over a decade. If even 90% of this is due to clerical errors, the 10% corruption would equal $3.1 billion annually.

Third, able-bodied adults without small children should work, train, or volunteer in order to earn Medicaid. Retiring their PlayStations and joining the labor force will fortify the 62% of physically fit Medicaid recipients who do not work. They will regain their dignity, self-respect, and many will find full-time employment and private health insurance. This idea enjoys 73% voter support and could save taxpayers up to $287 billion over 10 years.

Republicans should avoid the price-control bandwagon and, instead, give Medicaid a strong dose of limited-government therapy.

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