The U.S. market's high prices create the large profit pool necessary to fund risky drug development. If the U.S. adopted price negotiation like other countries, the global incentive for pharmaceutical innovation would shrink, resulting in fewer new drugs being developed worldwide.

While MFN pricing is seen as a major threat, it could have an unexpected positive effect. It would force companies launching new drugs to establish a GDP-adjusted global price from the start, ending the current system where the U.S. effectively subsidizes lower prices elsewhere.

America's high drug prices, while socially debated, ensure that global biotech innovators, including those in China, prioritize bringing their best drugs to the US market. This guarantees American access to cutting-edge treatments developed anywhere.

To fix the R&D funding imbalance, the CEO proposes a 'one fair price' system. A drug would have one US price with no rebates, and a price in other developed nations would be indexed to their GDP per capita.

The gap between U.S. and international drug prices is a structural feature of the pharma economy. High profits from the U.S. market fund expensive R&D that ultimately benefits the rest of the world, which pays far less for the same innovations. This reframes the debate around high American healthcare costs.

Despite innovation emerging worldwide, the ultimate goal for any new drug inventor is U.S. approval. The primary driver is the potential for high drug prices in the American market, which ensures the U.S. remains the central hub for late-stage clinical development and benefits from global R&D.

The Inflation Reduction Act's (IRA) pricing cuts on patented drugs reduce the financial returns necessary to fund R&D. This is causing research cuts and a decline in biotech funding, creating an innovation vacuum that international competitors are poised to fill.

Contrary to popular criticism, the US healthcare system is the global leader in medical innovation. While burdened by administrative "work tax," its core quality is unparalleled compared to systems in Canada or the UK. LLMs are the key to removing this inefficiency, not overhauling the system.

Both in the US (with Medicare/Medicaid) and China, the areas of medicine that see the most government spending on drugs also attract the most R&D investment. China strategically uses this mechanism to direct innovation towards its public health priorities.