Make money doing the work you believe in
Since you bring up health care costs, on the stuff Trump is claiming he’s doing on U.S. prescription drug prices, a while back I noted that, at Davos, he indicated numerous world leaders has already agreed to paying substantially increased drug prices so that we could pay less (and apparently keep pharmaceutical profits unchanged). This, as part of his “Most Favored Nation” thing, that he is hoping to get codified into U.S. law.
And, I also noted that we doubt the world leaders actually agreed to that.
(One place I have written that, with the link to the part of his Davos address with the assertion is within my own post here:
However, a working paper from NBER that I got linked to by a Health Affairs newsletter, this one:
has me realizing my whole conception of the Most Favored Nation (MFN) thing is wrong. Many economists probably already realized this.
If MFN kicks in, then pharmaceutical companies, in order to not lose their substantial U.S. revenue, can be expected to bargain in such a manner as to extract a higher price in Europe and other developed countries than they get now, likely by bargaining harder, and threatening to withhold each drug entirely from the market in each country. (No agreement with Trump is involved. Just the force of the new game theory result with the MFN rules.)
Further, the authors of the paper, admittedly using a complex model that can’t possibly be that certain, come up with relatively small decreases on U.S. drug prices with MFN.
So, MFN seems like a trick, with MFN suggesting to people that U.S. drug prices will go down to CURRENT prices in the rest of the developed world, when they will not. They will go to the FUTURE higher prices in the rest of the developed world. (And give the rest of the developed world a jolt of healthcare cost inflation, and hostility to the U.S., as well.)
The authors indicate that direct price controls in the U.S. would have a better effect on U.S. prices.
(I did a little post on this MFN angle on my own substack:
though I don’t think it has any content not in this comment.)