Right ailment, wrong prescription

OPINION:

In July, when President Trump fired off letters to 17 of the world’s largest drug manufacturers demanding most favored nation prices in the United States within 60 days and threatening tariffs as high as 200%, he put the right headline on the wrong prescription. No patient should pay more here than abroad, and the generic drug industry welcomes any serious plan to lower costs.

However, hard‑edged trade disruptions ricochet. They raise input prices, trigger retaliation and, most dangerously, create shortages that leave pharmacy shelves bare. All the while, the Big Pharma monopolists and the pharmacy benefit manager middlemen are still getting away with highway robbery.

It’s essential that America’s patients get a fair deal and that we incentivize more domestic manufacturing, but that will take a long time. Low‑friction reforms that would save patients billions of dollars today are still going nowhere in Washington.

Last year, the United States spent more than $700 billion on branded prescription medicines, more than 10 times what we spent on affordable generics, which already account for 90% of all prescriptions dispensed. Generic and biosimilar spending has been flat, at roughly $60 billion a year, for a decade, an actual decline once adjusted for inflation and population growth. Instead of supercharging this proven savings engine, current policy proposals threaten to choke it off.

Here’s the real low‑hanging fruit:

End monopoly abuse, starting with Keytruda

Congress keeps talking about curbing patent thickets and product‑hopping, yet the only drug‑pricing item that made it into the recent reconciliation package extended exclusivity on blockbuster cancer drug Keytruda for at least another year, preserving unlimited pricing power and tacking billions of dollars onto Medicare’s bill. If Washington is serious, it should pass the bipartisan Patent Abuse Reduction Act, which is now gathering dust in committee.

Fix the biosimilar bottleneck

The U.S. trails Europe badly in approvals and uptake because we cling to a two‑tier biosimilar pathway that even the Food and Drug Administration admits adds cost without scientific benefit. Europe uses one science‑based standard; we use two and wonder why access lags. Over the next decade, 118 biologics worth $230 billion in U.S. sales will lose patent exclusivity, yet only 12 have a biosimilar in development. Streamlining the pathway and passing pending interchangeability legislation would unlock the single biggest driver of future savings.

Stop the PBM ‘shadow tariff’

While the White House contemplates duties at the border, pharmacy benefit managers already levy spread pricing, rebate walls and clawbacks that inflate costs far more than any customs duty. Shine a bright light on those opaque contracts, and the savings will flow immediately.

Accelerate formulary adoption in Medicare Part D

New generics languish on nonpreferred tiers for an average of three years, and plans often cover them for barely 50% of beneficiaries even after that point. Aligning incentives so plans embrace lower‑cost options on Day 1 would save seniors long before any tariff idea clears litigation.

Tariffs and MFN mandates miss the mark because global supply chains are complex and fragile. A tablet’s active ingredient may be sourced in India, finished in Ireland and packaged in Illinois. Slapping a 200% duty on any link in that chain raises costs for every American patient. Next, generics run on razor‑thin margins. Even a modest tariff can flip a product from break‑even to loss, prompting manufacturers to exit the market, triggering shortages. Finally, legal snarls abound. MFN mandates invite World Trade Organization challenges and years of contract disputes — hardly an express lane to lower prices.

By contrast, cracking domestic monopolies, streamlining biosimilar approvals and squeezing PBM rents strike directly at the drivers of high U.S. prices without risking shortages or diplomatic blowback.

A serious road map

Mr. Trump’s instinct to champion lower prices is laudable, but tariffs make for punchy politics and competition makes for lower prices. Here’s the agenda that would work:

• Pass patent‑thicket and REMS‑abuse reforms this fall.
• Enact a single, science‑based biosimilar pathway and authorize automatic interchangeability status with biologics.
• Mandate same‑day generic placement on preferred tiers in Medicare and Medicaid.
• Ban PBM spread pricing and require full pass‑through of rebates at the point of sale.
• Shelve broad pharmaceutical import duties that would raise, not lower, U.S. costs.

Members of the Association for Accessible Medicines are open to onshoring, if incentives are right, but do these five things and American patients will save billions of dollars before the first customs officer ever inspects a bottle of pills.

• John Murphy III leads the Association for Accessible Medicines, whose members manufacture the generic and biosimilar medicines that comprise more than 90% of the prescriptions in the United States.