America leads the world in pharmaceutical innovation, developing cutting-edge treatments that improve and save lives. The U.S. does a better job balancing the trade-offs of costs and innovation than most other nations. But that is under threat from state and federal policies.

The federal government put in place price controls under the Biden-era’s “Inflation Reduction Act.” And the Trump administration looks to be pushing forward with “Most Favored Nation” pricing models, which tie drug prices to those in other nations with rigid price caps. Both efforts promise short-term savings, but they would come with long-term costs that hamper innovation, reduce health-care access, and harm patients.

Unfortunately, states are following suit. The Michigan Legislature is making another attempt to put in place a “Prescription Drug Affordability Board” which could impose price caps.

The results of this would be predictable. Price controls, whether at the federal or state level, distort the market. They don’t just target high prices – they target the system that drives investment in treatments for rare diseases, cancer, and chronic conditions.

Affordability is a legitimate concern, but simply capping prices or copying Europe's failed systems is the wrong policy. Lawmakers should empower states to embrace transparency, competition and modern market-based tools such as outcome-based contracts and co-pay assistance protections. States can encourage personalized care and reward innovation.

Price controls sound appealing in theory, but in practice they trade short-term savings for long-term problems. States like Michigan have the opportunity to lead with smarter reforms that lower costs without sacrificing progress.

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