Trump’s Latest Drug Deal Could Save Lives In America And Britain

I observed last month in these pages that President Trump’s recent deal with Eli Lilly and Novo Nordisk regarding coverage and pricing of obesity drugs didn’t make much sense. In essence, the agreement gave the pharmaceutical companies additional regulatory benefits for a reduction in prices already taking place due to increased competition. 

By contrast, the recent trade agreement on drug pricing announced with the United Kingdom will benefit American and British patients alike. American patients may see relief in the form of lower drug prices, while British patients will benefit from a loosening — albeit not an elimination — of the rationing of drugs by its single-payer health care system.

Less is More for American Patients

When it comes to prescription drugs, the gist of Trump’s drug pricing campaign stems from the fact that many government-run health care systems, like Britain’s National Health Service (NHS), use their leverage to demand that manufacturers lower prices in exchange for coverage by that country’s health system. Because the United States by and large does not engage in such tactics, American patients generally pay more than those overseas. Trump’s calculus is essentially zero-sum: Other developed countries should pay more for their drugs, so companies can lower their prices in the U.S.

The agreement with the U.K. takes steps in that direction. In exchange for relief from any potential pharmaceutical tariffs, the British government will pay 25 percent more for new medicines. That’s not an easy thing for Britain to promise, seeing as how a bloated welfare state and years of anemic economic growth have forced Keir Starmer’s Labour government into a series of unpopular tax increases. Those higher prices paid by the NHS will hopefully allow pharmaceutical companies to lower their prices for American customers.

Help for British Patients Too

While paying more for prescriptions raises burdens on British taxpayers, British patients will benefit. The agreement also includes “a major change to the value appraisal framework at the U.K.’s cost-effectiveness agency, the National Institute for Health and Care Excellence (NICE). NICE’s ‘quality-adjusted life year’ [QALY] threshold, currently £30,000 ($39,789) per year, will rise to £35,000.” 

NICE had not formally raised its QALY thresholds since its creation in 1999, a shamefully long delay given more than a quarter-century of inflation. Now, however, the organization said the thresholds will rise beginning in April: “Our analysis suggests that increasing the standard threshold to £25,000-£35,000 will allow us to recommend an additional 3-5 medicines or [disease] indications per year.” 

Therein lies a great irony: Because of the influence of an American president, British patients will have more and better access to prescription drugs that will improve or even save their lives. However, I wouldn’t hold my breath for most Brits to acknowledge this benefit, let alone thank Donald Trump for helping to bring it about.

Harm of Government-Imposed Rationing

But the increase in the QALY threshold doesn’t change the inherently arbitrary, or harmful, nature of decisions in Britain and other countries that ration care via this metric. NICE implied as much in its statement on the new agreement, noting that “the value [of a life] comes from asking thousands of people from the public to judge how good or bad different health states would be.”

As innocuous as that statement might sound — why not let the people decide? — the public has traditionally exaggerated the effect of disabilities on individuals’ quality of life. A 2019 report by the National Council on Disability quotes one U.K.-based study as saying nearly a quarter of individuals would view living the rest of their lives in a wheelchair as worse than death, even though most individuals with disabilities report similar levels of life satisfaction as the general population.

Therein lies the problem with the QALY metric and with having government bodies like NICE using said metric to determine what treatments governments will cover. Because it devalues the benefits provided to someone of less than “perfect” health, it discriminates against the most vulnerable and arguably violates the Americans with Disabilities Act.

Having previously expressed concern over the summer that Trump’s desire for prescription drug deals would import the harmful QALY metric from places like Britain to America’s shores, I am glad the agreement with the U.K. did no such thing and, in fact, reduced (albeit without eliminating) the QALY’s influence in Britain itself. That represents a win for American patients, who will benefit from lower prices, a win for British patients, who will have less worry about their government denying them drugs and treatments not deemed “worth it,” and wins for Americans and Britons with disabilities.