Donald Trump just sold us all out on drug pricing
In other words, America, we've just been sold out on the price of drugs.
According to the report, the order includes nothing to curb prices. Instead, drug companies are going to get more power to charge monopoly prices overseas, and be allowed to give even fewer discounts to hospitals with poor patients. Meanwhile, the administration is promising to roll back regulations that pharma has complained about.
Nothing for the American people, everything for the American corporations.
This can all be traced back to a meeting Trump had with pharmaceutical CEOs back in January. There, he basically outlined that he would be doing everything that's in the executive order, but he also told executives "you have to keep your prices down."
That was it. Then they all got in their private jets and flew back to their corner offices. That day, the Nasdaq Biotechnology Index had its best day in weeks, gaining nearly 3%, as the market indicated that no one was afraid of the big bad Trump.
You see, this meeting with CEOs was just supposed to be the start of how the White House tackled this problem. Ideally, after they left, Trump's team would get together and take their proposals in consideration with the volumes and volumes of research out there about this topic, and put together something that could actually help lower prices. Instead, it looks like only the industry's suggestions made it into the order.
Trump is the kid in the high school group project who offers to turn in the final product so no one notices he didn't contribute anything at all.
It's not as if ideas to fix this aren't floating around Washington, and it's not as if legislators don't know the kinds of dirty games drug companies are playing. Earlier this month, the Senate Committee on Health, Education, Labor, and Pensions held a panel on drug pricing and brought up a bunch of obvious issues that have become the center of the drug-pricing debate and, in some cases, Department of Justice investigations.
Such as:
- Collusion: As Allan Coukle, senior director of health programs at Pew Charitable Trusts, pointed out, whenever one multiple sclerosis drug hits the market, they all go up in price. This is not an accident, and it happens thanks in part to a lack of pricing transparency. In fact, last year the Obama Justice Department went after around a dozen big pharmaceutical companies, including EpiPen-maker Mylan, for colluding to keep prices high. The makers of insulin were just accused of doing the same thing in a class action lawsuit.
- Pharmacy benefit managers: These are middle men who are supposed to keep costs down by acting as gatekeepers to insurers. They also negotiate rebates for buying drugs in bulk. Problem is, they get to pocket some of that rebate for themselves (how much is considered a "trade secret"), so one witness at the Senate panel suggested we do away with the rebate system all together. One Republican Senator, Bill Cassidy (LA), agreed. "It seems like the rebate isn't going so well," he said. "Why not have a low upfront price which would be the ultimate concession"
- Myth busting: As it was made quite clear during the panel, research and development costs aren't what's really contributing to high drug prices when it comes to big pharma. More money is spent on marketing drugs than developing them.
Now to be fair, it looks like there's one tiny measure in Trump's order that hints at helping - basically taking PBM rebates out of Medicare. Of course, it's unclear how this order would tackle that as there are no specifics and this would have to be legislated.
Another interesting idea mentioned in the order is "value-based" drug pricing - paying drug companies for the value a drug brings to society or an individual. That could be a killer for some drug companies that make incredibly expensive drugs for rare diseases, but again, nothing concrete on that measure.
This toothless order is the result of asking some of the richest CEOs in America what to do about a problem they don't want to solve. And it settles something about the Trump administration. If you were hoping that the populist Trump from the campaign trail would keep some of the promises he made to his base, you can stop now.
Trump is not for his base, he's not for anyone. He's a corporatist, and he will continue letting corporations make decisions that his White House is either too lazy or too incompetent to make to the detriment of Americans, whether they voted for him or not.