This will based on the conservative principals of limited federal government power, no doubt.
the gov't has been subsidizing "big pharma" for years, (not a consevative principle) and in turn big pharma has been charging taxpayers out the bazoo. Though what Trump is doing is not truly conservative, Trump is looking out for the US taxpayers while leveling the playing field where other countries will have to pay more.
from GROK
the U.S. government subsidizes pharmaceutical companies, primarily through indirect mechanisms rather than direct cash payments. These subsidies take several forms, rooted in public funding and policy incentives that reduce costs for private companies. Here’s a breakdown based on available evidence:
Publicly Funded Research: The National Institutes of Health (NIH) and other federal agencies fund basic and applied biomedical research, which pharmaceutical companies often rely on to develop new drugs. For example, a study found that NIH spent $187 billion on research related to 356 drugs approved between 2010 and 2019, covering basic science and some applied research. Every one of the 210 drugs approved from 2010 to 2016 benefited from publicly funded research, either directly or indirectly. This public investment reduces the industry’s R&D costs, as companies can build on government-funded discoveries without bearing the initial financial risk
Tax Credits and Deductions: The federal government provides tax incentives that lower the cost of drug development. The R&D tax credit, made permanent in 2015, allows pharmaceutical companies to offset costs for developing new products or processes. Additionally, deductions for marketing and advertising expenses—estimated at $29.9 billion from 1997 to 2016—further reduce tax liabilities. Tax breaks on offshore profits, like those following the 2017 tax law, also benefit companies, with firms like Eli Lilly saving billions
Medicare and Medicaid Subsidies: Government programs like Medicare Part D and Medicaid increase demand for prescription drugs by subsidizing purchases, effectively guaranteeing revenue for pharmaceutical companies. In 2019, federal, state, and local governments funded about 60% of outpatient retail drug costs, totaling roughly $208 billion. These programs often pay prices tied to private market rates, which can be inflated, indirectly subsidizing companies by ensuring high profit margins
Patent Protections and Market Exclusivity: The U.S. patent system and FDA regulations grant pharmaceutical companies periods of market exclusivity, delaying generic competition. This allows firms to set high prices without market pressure, effectively acting as a subsidy by guaranteeing profits. The Bayh-Dole Act enables companies to commercialize federally funded research while retaining exclusive rights, raising concerns about whether the public receives adequate returns
Specific Examples: Taxpayer-funded drugs like Taxol, developed through NIH research and licensed to Bristol-Myers Squibb, show how companies profit from public investment. Medicare spent nearly $700 million over five years on Taxol, despite its government-funded origins. A 2024 report highlighted that all 10 drugs up for Medicare price negotiations received $11.7 billion in taxpayer-funded research, yet generated $70 billion in revenue for companies in 2022 alone
However, the pharmaceutical industry argues that their role in late-stage development, clinical trials, and commercialization justifies their profits, as these stages require significant private investment (estimated at $1.5 billion per drug). They also note that NIH funding focuses on basic science, which lacks immediate commercial value without private-sector translation. Critics counter that taxpayers “pay twice”—first through taxes for research and again through high drug prices—without mechanisms like reasonable pricing clauses to ensure affordability
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