Approximately 3.2 million Americans suffering from cancer, heart disease, and other serious or life-threatening diseases benefit from home infusion therapy. As the name suggests, home infusion therapy allows these patients to receive intravenous treatments at home instead of at a hospital. This improves the patient’s quality of life—as well as their health—by reducing their risk of contracting infections from spending too much time in hospitals. Infusion therapy is also more cost effective than hospital-administered treatments, and can be as much as 12 to 24 times cheaper.
But the cost of home infusion therapy, like all medical procedures, can increase significantly depending on the price of the drugs required for the treatment. Expensive drugs can increase the cost of infusion therapy to as much as $3,000 per treatment! It is therefore understandable that politicians would want to lower these costs—especially right before a crucial election year in which “affordability” will be one of, if not the, main issue for voters.
The House Energy and Commerce Committee recently marked up the Joe Fiandra Access to Home Infusion Act (HR 4993), legislation expanding access to home infusion therapy. During the markup, Texas Representative Lloyd Doggett offered an amendment to cap prices for home infusion drugs at the lowest level paid by consumers in other countries: in other words, to impose price controls. Representative Doggett’s amendment is based on President Trump’s most favored nation (MFN) drug pricing scheme.
MFN pricing is rooted in the correct idea that it is unfair that American consumers pay more for drugs developed by American companies than consumers in other countries pay for the exact same drugs. This is especially the case when price controls are the reason foreigners pay less for medications than Americans. However, MFN pricing not only fails to solve the problem of high drug prices: it creates a new set of problems.
One problem with MFN pricing is that companies can evade the price controls by simply not selling their products in countries with government imposed price limits. This obviously will negatively impact consumers in those countries without benefiting Americans. Another way that drug companies can avoid compliance is to offer “rebates” to consumers while officially charging them the higher price. Since many countries prohibit disclosure of these rebates, the U.S. government cannot use them in determining the “most favored nation price.”
Most favored nation pricing deprives American consumers of several advantages they currently enjoy, like having access to new medicines before they are made available to the rest of the world. Darius Lakdawalla and Dana Goldman of the University of Southern California’s Schaefer Institute for Public Policy and Government Service write, “as the world's largest market for pharmaceuticals, America finds itself in the unique position of accruing the lion's share of the benefits from new medicines. We often recoup these additional costs in the form of longer and healthier lives.”
These benefits are put at risk by price control schemes. In 2019, the Congressional Budget Office (CBO) prepared an analysis of a bill to lower prescription drug costs for federal programs by allowing the Department of Health and Human Services to “negotiate” prices with drug companies. The CBO wrote that while price controls can provide a short-term benefit,“in the longer term, CBO estimates that the reduction in manufacturer’s revenues would result in lower spending on research and development and thus reduce the introduction of new drugs.”
Fortunately, there are ways to lower drug costs without resorting to price control schemes like MFP. According to a 2024 Rand Corporation report, the prices for name-brand drugs in the U.S. were “422 percent of prices in comparison countries.” Conversely generic drugs, which account for 90% of the prescription drugs sold in the United States, are “on average cheaper at 67 percent of prices in comparison countries, where on average only 41 percent of prescription volume is for unbranded generics.”
President Trump and Congress can also help lower the price of prescription drugs by reforming those policies that have driven the costs of bringing a new drug to market to over $2 billion while needlessly delaying the ability of sick patients to begin benefiting from them. Even though it was modeled on President Trump’s proposal, every Republican on the Energy and Commerce Committee opposed the Doggett amendment. Republicans must continue to stand firm against schemes to codify MFN prescription drug pricing. Price controls are not the way to make America great or healthy again.
