Trump attempt to rein in drug prices may have limited success
On the last day in January, Trump called the price hikes for medicine “astronomical” and met behind closed doors with chief executives from some of the nation’s biggest drug companies.
“We have to get prices down,” the president said before the meeting. “We have no choice.”
During his campaign, Trump often said that if he were elected, the federal government would start negotiating with the drug companies over the prices Medicare pays for drugs – something it’s now prevented from doing by law.
On Tuesday White House spokesman Sean Spicer said Trump still supports allowing Medicare to negotiate drug prices.
But after his meeting with pharmaceutical executives, Trump did not mention the proposal and hasn’t mentioned it since. Instead, he suggested several other options, which some say aren’t likely to accomplish much.
Trump suggested streamlining the Federal Drug Administration approval process to get new medicines on the market as quickly as possible,”instead of waiting many, many years.”
But the president himself has placed obstacles to his plan for the FDA, said David Vladeck, a professor at Georgetown University Law Center.
He said the problem with this “blunderbuss” approach is that it conflicts with another Trump policy – to eliminate two federal regulations for each one that is promulgated. Another Trump executive order has resulted in a federal hiring freeze that would affect the FDA’s ability to speed up drug approvals.
“These will cripple the FDA’s ability to do much,” Vladeck said.
Vlaceck and others also are concerned that speeding approval of new drugs would endanger patients.
“President Trump’s promise to cut regulations and speed up the drug approval process at the FDA is a dangerous idea,” said Rep, Rosa DeLauro, D-3rd District. “Millions of Americans across the country rely on the FDA to ensure that the drugs that they take each day are safe and effective.”
DeLauro said it is “an outrage that President Trump would consider putting the profits of pharmaceutical corporations ahead of safety.”
In his meeting with pharmaceutical companies, Trump also promised to consider new tax breaks for the industry as part of a comprehensive tax reform package.
The pharmaceutical industry has largely steered clear of criticizing Trump’s talk about the high price of medicine.
“Ensuring patients have the access to the medicines they need is Alexion’s top priority, and we look forward to working with the new Congress and Administration to enhance the competitive marketplace in the United States, ensure patients have access to affordable health care coverage, and foster the continued development of new innovative medicines,” New Haven-based Alexion said in a statement.
Pfizer CEO Ian Read has a strategy to help Trump deliver on his promise to lower drug costs – pay more for medicine now so you can pay less later.
“One way of lowering health-care costs is to have more innovation and more competition,” Read said last week at the World Economic Forum in Davos, Switzerland. “So pay more for medicine so we can develop more good medicine, so we can drive, through competition, lower costs.”
Meanwhile, the nation’s pharmaceutical companies have launched a $100 million advertising campaign.
The Pharmaceutical Research and Manufacturers of America’s ads highlight lifesaving innovation and science. The first television spot in the “Go Boldly” campaign, includes a voice-over of Welsh poet Dylan Thomas’s “Do not go gentle into that good night.”
John Rother, executive director of the Campaign for Sustainable Rx Pricing, a coalition of groups that includes health insurers, the AARP and Walmart, said the ad campaign is aimed at “making Americans forget about their price gouging.”
“That’s nothing new,” he said. “Big Pharma spends more on advertising than they do on actual research. But no amount of advertising will make hard-working families forget the consequences of their out-of-control drug costs.”
Negotiating Medicare drug costs
For the past decade, drug companies enjoyed big profits from multi-billion dollar blockbusters like Lipitor and Viagra. But as these blockbuster medicines grew fewer, companies found other ways to make money and keep stock prices rising.
Many began bringing cancer drugs to market with annual price tags of $100,000 or more, or buying up cheap generic drugs – a practice used by Martin Shkreli on Daraprim and Mylan on EpiPen – and raising the price for them, and other tactics.
Eventually, the cost of drugs became a larger and larger portion of the nation’s medical expenditures, reaching about 10 percent of that pie now.
On Wednesday, Sens. Richard Blumenthal and Chris Murphy joined a group of 27 other Democratic senators in a letter to Kaléo Pharmaceuticals, which manufactures an easy-to-use injector device containing Naloxone a drug that has saved the life of many who have overdosed on opioids.
The senators say recent reports reveal Kaléo raised the price of a two-pack injector, marketed under the name of Evzio, from $690 in 2014, to $4,500 currently and demanded the drug company explain the reason for the steep rise in the cost of the drug.
To Sen. Bernie Sanders, I-Vt., and others, mostly Democrats, in Congress who want to slow the rise in medicine prices, the solution is allowing the federal government to negotiate Medicare prices.
“The root of this problem is that we are the only major country not to negotiate drug prices with the pharmaceutical industry,” Sanders said in a recent op-ed. “You can walk into a pharmacy today, and the price could be double or even triple what you paid for the same medicine a year ago, and there are no legal barriers in place to stop these arbitrary increases. Pharmaceutical corporations can raise prices as high as the market allows. If people die, it is not their concern. If people get sicker, it is not a problem for them.”
Medicare, the federal health care program for people 65 and older – is the largest single drug purchaser in the nation.
Sidney Wolfe, founder of Public Citizen Health Research Group, co-authored a study that determined the federal government could save between $15.2 and $16 billion a year if it had the authority to put out bids for Medicare-paid drugs as it does in the Medicaid and veteran’s health programs.
Wolfe also said Congress could take other steps that would push the price of drugs down. One would outlaw so-called “pay for delay” tactics used by the pharmaceutical industry.
Wolfe said brand name drug companies often sue a generic drug firm over the right to produce an alternative, tying up the production of that generic drug for years. They then offer to settle the lawsuit for a certain amount of money, confident that the payout is a fraction of what the company would have lost in business to the generic drug.
“The drug-pricing issue is so multifarious that there’s not one solution,” Wolfe said.
Will Trump push Congress?
Some members of Congress are looking for those solutions.
Sen. Amy Klobuchar, D-Minn., and Rep. Peter Welsh, D-Vt., have introduced bills in the House and Senate that would allow Medicare to negotiate drug prices. The legislation is co-sponsored by DeLauro in the U.S. House and by Sen. Richard Blumenthal in the Senate.
Rep. Kurt Scharder, D-Or., has introduced a bill that would speed FDA approval of generic drugs.
Meanwhile, Sen. John McCain, R-Ariz., has sponsored legislation that would require the FDA to promulgate regulations that would allow people to import certain prescription drugs from an approved Canadian pharmacy. Most U.S. brand name drugs are sold at much lower prices in Canada – and most everywhere else overseas.
McCain said his bill would save Americans hundreds of dollars a years in prescription drug costs.
“We must do more to stop the unsustainable increase in the price of prescription medication by introducing greater competition into the pharmaceutical marketplace,” he said.
Similar legislation has been introduced in previous Congresses. But pharmaceutical interests have succeeded in keeping the legislation from being adopted.
That’s not likely to change without a push from the White House – and there’s no indication yet that push is coming.
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