By CARMEN PAUN – 4/9/19
U.S. biotechnology lobby BIO said the Trump administration’s proposal to peg the prices of certain drugs to a basket of mostly EU reference countries would lead to a “downward spiral” that would negatively affect the development of new medicines. “The U.S. price goes down because they’re referencing France or Germany. The Germans reference the U.S. price then their price goes down because the American price just went down and where does that lead? It leads to no payer really taking into consideration the risk and cost of innovation. That’s going to have a detrimental effect on the incentives to develop new medicines,” Joe Damond, BIO’s executive vice president for international affairs, said on the Vital Health podcast released Monday.
Donald Trump has suggested that “foreign freeloaders,” including the EU, are not paying their fair share when it comes to the cost of medicines. But Damond rejected the idea that any downward pressure from the U.S. could raise prices in Europe. “[Biotech companies] are dealing with a monopsonist single payer where the choice is to serve the entire population or to serve nobody. You have no leverage unless you just want to walk away from 80 million people in Germany or 60 million people in the U.K. entirely. So they have you. The managers of the biopharma companies in Europe are not incented to give in and lower their price,” he said.
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