I believe that President-elect Donald Trump will succeed in bringing down health care costs, and tackling soaring drug prices will be at the forefront of his battle. This may have come as a shock to the industry, who likely believed that they’d be given a free pass under a Republican presidency and Republican-controlled Congress. It is likely that on Election Day the Big Pharma companies prematurely let out a collective sigh of relief believing that a Republican-led government would never allow for imported medicines or for Medicare to negotiate drug prices, but it appears that the well-deserved panic is starting to set in.
On the day Trump was named Time Magazine’s “Person of the Year,” the publication released excerpts from a November interview in which he divulged plans to address out-of-control drug costs.
“I’m going to bring down drug prices. I don’t like what’s happened with drug prices,” he said.
Those two lines, short enough to fit in a Tweet, sent shockwaves through the industry. Biotechnology and pharmaceutical stocks took a hit, signaling that the relief they had been enjoying since Election Day was short-lived.
They could have and should have seen this coming, as Trump has previously advocated for allowing cheaper pharmaceutical drugs manufactured abroad to be sold in the U.S. During his campaign, he also said allowing Medicare to negotiate drug prices directly with pharmaceutical companies could save the agency $300 billion per year. While his savings number has been disputed, the cost-cutting measure aligns with what Democrats have peddled before, and he hasn’t backed down yet.
Where he will likely run into trouble is with Senate Republicans and the pharmaceutical industry itself, which has significant lobbying power in Congress. But where others before him have bowed to the pressure of medical industry titans, Trump will not. We recently watched Martin Shkreli, a hedge fund manager-turned pharmaceutical CEO raise a life-saving drug’s price from $13.50 to $750 per pill. The public responded with outrage, and Trump called him a “spoiled brat.” To her credit, Hillary Clinton criticized him too, but she was also accepting campaign funds from pharmaceutical executives.
Shkreli cited the need to “turn a profit on the drug” for the hike, and while he may have come under the most criticism, he is certainly not the first in the industry to put profits before patients. According to prescription-benefit manager Express Scripts Holding Co., from 2008 through 2014, average prices for the most widely used brand-name drugs jumped 128 percent. The industry chalks soaring costs up as a trade-off for all the money saved in preventing hospitalizations and illness-related complications. But even once in those hospital settings, something as simple as an Advil will cost significantly more when administered by a medical professional than if you picked it up at a local CVS, and that’s the industry’s fault.
If pretending that practicing preventative medicine is the tradeoff is what makes the industry heads sleep better at night so be it, but for the countless ill patients who cannot afford their medications, no price hike is justifiable. Really, what’s to blame here is the U.S. government for allowing such atrocities to occur in the first place. If a parent gave his 13-year-old keys to a Ferrari and then the teen crashes it, you don’t blame the teen, you blame the negligent parent.
Unlike civilized countries elsewhere in the world, the U.S. government does not regulate prices or partake in negotiations. Drug makers in the U.S. enjoy exclusivity in the marketplace under patents that last for 20 years, preventing healthy competition and the sovereignty of monopoly for a devastating period of time. Generic drug makers are often run out of the marketplace when brand-name medicines hit the shelves as it costs too much to try to keep up.
A Wall Street Journal investigation found that compared to Norway, U.S. prices were higher for 93 percent of 40 top branded drugs available in both countries. It was similar in England and Ontario. A large difference between these countries and ours is the power of negotiation. In other countries drug companies are met with price caps and have to prove a drug’s value in comparison to existing ones before getting cost approved.
While opponents of government negotiating say it will discourage drug industry research and deny patients access to some medications, I ask them to consider if the alternative that we are living is really that much better. Our patients are already dying without proper medication because of soaring costs, and many causes are short on funding while marketing geniuses and those with good handshakes gobble up airtime and all the spending that comes with it. We need a change, and I’m hopeful Trump, the great negotiator, will champion it.