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Sens. Josh Hawley (R-MO) and Peter Welch (D-VT) introduced the Fair Prescription Drug Prices for Americans Act, which would impose price controls on biopharmaceutical companies in the U.S. (POLITICO).

• The NAM has long opposed such misguided measures as government price controls would devastate research and development and result in fewer lifesaving treatments for patients.

The context: This bill dropped Monday amid congressional Republicans’ efforts to produce a legislative package of tax reforms, spending cuts, border security and much more.

• However, the GOP’s plans for “drug pricing as part of their yet-to-be-finalized policy package remains to be seen.”
• “While the White House is pushing what it is calling a ‘most favored nation’ plan, Speaker Mike Johnson poured cold water on the idea during an interview last week.”

The details: Most favored nation pricing would peg certain U.S. drug prices to the lowest price paid by a peer country—even though the state-run health care systems of America’s competitors in the OECD are not directly comparable to the United States’ innovative private-sector model.

• This policy was proposed during the Trump administration’s first term, when the NAM raised concerns that it could “stifle the development of treatments and vaccines.”
• “In addition to prohibiting pharmaceutical companies from selling drugs within the United States at a higher price than the international average, [the Hawley–Welch bill] also would impose a penalty if companies violate the prohibition,” according to POLITICO.

Better policy: The NAM has urged policymakers to take an alternative tack that would reduce drug prices for patients without threatening innovation: reforming pharmacy benefit managers, underregulated middlemen that drive up the cost of medicines. The NAM’s policy recommendations to Congress include:

• Increase transparency into PBMs’ business models and the factors that contribute to a drug’s cost and formulary placement, as well as PBMs’ compensation.  
• Ensure full rebate passthrough so 100% of negotiated pharmaceutical savings are passed from PBMs to health plan sponsors and workers.  
• Delink PBM compensation from the list price of medications to reverse PBMs’ incentives to drive up prescription list prices. 

The NAM says: “Manufacturers in America are driving global pharmaceutical innovation, and importing foreign price controls on innovative biopharmaceutical products would undercut innovation in the pharmaceutical industry, threaten patient access and weaken U.S. competitiveness,” said NAM Director of Health Care Policy Jess Wysocky in response to the Trump administration’s plan.

• “A serious manufacturing strategy doesn’t rely on government price-setting. It embraces free enterprise, rewards innovation and delivers real results for Americans.”