WASHINGTON, D.C. — In response to the Trump Administration’s recent proposal to impose foreign price controls on U.S. prescription drugs, FreedomWorks Foundation has issued a report detailing the problems inherent with such a plan. Patrick Hedger, FreedomWorks Foundation Director of Policy, issued the following statement in conjunction with the report’s release:
“There are a number of issues with the idea of benchmarking U.S. drug prices to foreign price controls, including the fact that the avenue the Trump administration has chosen grossly exceeds its legal authority. However, the focus of this paper is on the fundamental flaw at the heart of this proposal: it assumes that governments have the ability to efficiently set prices for any good or service. This is something that even a basic course in economics will tell you is just not true.
“Government price controls always result in inefficiencies because prices do nothing more than transmit information. If you don’t like what prices are telling you, just changing them won’t solve the underlying problem.”