From Washington to the World

The Bulletin

Your biweekly update on health economics, policy, and impact

This Bulletin looks at why tariffs on generic medicines may not solve America’s supply problems, what European drug-pricing policy can teach Washington, and whether the latest Congressional Budget Office model captures how changes in pharmaceutical revenues could affect future innovation.

Why President Trump’s generic drug tariffs are unlikely to fix America’s supply problem
What Europe Can Teach Washington About Drug Pricing: A Conversation with OHE's Graham Cookson
Is the revised Congressional Budget Office model of new drug development fit for purpose?

That’s your Bulletin summary, or read on for the full stories below.

Graham Cookson, Chief Executive

From Washington to the World

Washington is rewriting the rules of pharmaceutical economics at extraordinary speed.

Take President Trump's new tariffs on generic medicines — zero today, 200% by 2029 — intended to re-shore manufacturing and secure America's drug supply. In our view, this policy is more likely to do the opposite. When margins are measured in pennies, a tariff is more likely to push out manufacturers rather than invite investment.

Or take drug pricing itself. In a wide-ranging conversation with We Work for Health, I explored what Europe's decades of price controls can actually teach Washington including whether a NATO-style spending commitment could share the costs of innovation more fairly.

And underpinning it all: the models. Our critique asks whether the Congressional Budget Office's revised simulation of drug development — the model behind the official innovation impact forecasts — is fit for purpose.

Three pieces, one theme: from Washington to the World. I hope you enjoy reading.

Can tariffs fix America’s drug supply problem?

Why President Trump’s generic drug tariffs are unlikely to fix America’s supply problem

The US heavily relies on overseas manufacturers for generic medicines. President Trump’s new policy aims to encourage manufacturers to move production back to the US, with importers facing zero tariffs for 2 years before rising to 100% in 2028 and doubling thereafter. If the aim is to strengthen supply, policy needs to address the pricing pressures and regulatory barriers that can make investment in generic manufacturing unattractive.

What are the three stand out issues?

Can innovation be protected when drug prices are cut?

What Europe can teach Washington about drug pricing: A conversation with OHE's Graham Cookson

As the US considers further changes to drug pricing, what can Europe’s experience tell us? Graham Cookson discusses how price controls can affect pharmaceutical investment and why policymakers need to look beyond the immediate goal of lowering prices. He talks about whether a more coordinated approach to spending could spread the cost of innovation more fairly.

What could the US learn from Europe?

Can changes in pharmaceutical revenue affect new medicines? 

Is the revised Congressional Budget Office model of new drug development fit for purpose?

US drug pricing policy is changing fast, and policymakers are trying to understand what this means for innovation. To this end, the Congressional Budget Office created a simulation model to predict innovation impact. Despite improvements in recent model updates, it still doesn’t reflect how the real world works well enough to guide policy decisions. 

How can these models help?

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The Bulletin

Your biweekly update on health economics, policy, and impact

Can tariffs fix America’s drug supply problem?

Can innovation be protected when drug prices are cut?

Can changes in pharmaceutical revenue affect new medicines?

Can changes in pharmaceutical revenue affect new medicines? 