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On behalf of the undersigned federal and state-based organizations, we write to express our opposition to the interim final rule to implement the Most Favored Nation (MFN) Model under section 1115A of the Social Security Act. We request you withdraw the rule.
The rule forces physicians, patients, and providers into a mandatory demonstration under the
The proposal imports foreign price controls into America's healthcare system. This will harm medical innovation and the development of new medicines. It will threaten high-paying American manufacturing jobs and do nothing to stop foreign freeloading. Instead, it will move
The need for free market policies that promote American medical innovation is clear. Manufacturers have developed several highly effective COVID-19 vaccines at the fastest rate ever. This good news is only possible because the
The MFN would do nothing to stop foreign freeloading
One of the goals of the MFN is to "end foreign freeloading," where foreign countries benefit from American innovation and the development of cures but do nothing to pay for the extensive investments required for the next generation of cures.
Supporters of the MFN have claimed the concept is a free-market proposal that will incentivize manufacturers to negotiate better deals. However, this theory is based on the flawed assumption that American manufacturers were not fighting as hard as they could against foreign price controls in past years.
Rather than fighting price controls that distort markets and impede innovation, the MFN would surrender to foreign freeloading by setting
Foreign countries pay less for medicines because they utilize price controls. There is little or no negotiation between foreign government and manufacturers which often forces innovators to accept lower prices in a "take-it-or-leave it" proposition.
While this artificially lowers the cost of prescription drugs overseas, it also results in reduced or restricted access to new medicines and higher prices for medicines when they enter the market.
The MFN would reduce access to new cures
Adopting foreign price controls will create the same problems that foreign healthcare systems suffer from - there will be less medical innovation resulting in fewer new treatments and cures leading to healthcare shortages for American patients.
Developing new medicines requires a substantial investment of time and costs. In all, it costs an average of
Patients in many of the countries referenced by the MFN have access to far fewer new medicines than patients in America.
According to a study by the
The fact is, if the
Not only will the MFN harm American patients in the form of fewer treatments and worse health outcomes, it also will threaten America's position as a leader of high-paying pharmaceutical manufacturing jobs.
Medical innovation is a key driver of job creation and the American economy. Every year, manufacturers invest more than
This is a substantial contributor to the
Pharmaceutical jobs are also high paying - the average compensation is over
These high-paying jobs can be found across the country. For instance, in
Politicians on both sides of the aisle routinely call for the creation of more high-paying manufacturing jobs. We should be pursuing policies that help create more of these jobs, rather than policies that threaten existing jobs.
The MFN will move America one step closer to a government run healthcare system
The MFN would move the
Progressives are pushing proposals to expand the power that government has over the healthcare system like "Medicare for All" and the public option. These proposals also heavily rely on price controls on the healthcare system.
Similar policies to the MFN can be found in the proposals pushed by progressives in
If the left had their way, government would control the entire healthcare system, an outcome that would also result in significant tax and spending increases and the loss of existing coverage for millions and millions of Americans.
It would lead to health care rationing, which occurs in other nations that have socialized health care, such as
The MFN Utilizes Obamacare to Circumvent Article I of the
We are also concerned that the MFN is being proposed through CMMI, an agency created by Obamacare. The agency was created with the goal of increasing efficiency in healthcare programs by conducting demonstrations in new health care delivery and payment for Medicare, Medicaid, and the
The MFN demonstration is mandatory and being conducted across the entire country, so the proposal is a major policy change that is being proposed to circumvent
As such, CMMI and the MFN violate Article I of the
Rather than utilizing CMMI to push broad policy changes on the country, CMS should work with lawmakers to enact long-term policy changes to lower prescription drug costs through competition, innovation and the removal of unnecessary regulatory burdens.
We urge you to withdraw the MFN interim final rule. This proposal would adopt foreign price controls that will harm America's role as a leader in medical innovation. It will imperil the next generation of cures and threaten high-paying manufacturing jobs across the country.
It fails to stop foreign countries freeloading off American R&D and will instead move the
Dr. Merrill Matthews Resident Scholar,
Stone Washington Member, Project 21
C. Preston Noell III President, Tradition, Family,
Katie McAullife, Executive Director, Digital Liberty
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The rule can be viewed at: https://www.regulations.gov/document?D=CMS-2018-0132-2750
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