Trump Predicts ‘Massive Drops in Prices’ for Drugs. Here’s Why That Probably Won’t Happen
On Wednesday, President Donald Trump issued a bold declaration on drug prices while signing Congress’ recently-passed “Right to Try” law for experimental medicines: “I think we’re going to have some of the big drug companies in in two weeks, and they’re going to announce because of what we did, they’re going to announce voluntary massive drops in prices. So that’s great. That’s going to be a fantastic thing.”
Trump’s comments weren’t just related to the bill he’d just signed (a notable piece of health care legislation in and of itself that’s divided patient advocacy groups and drug companies, but been championed by Trump and Vice President Mike Pence—you can read more on that debate here). The president was also referring to recently-announced plans by the administration and Health and Human Services (HHS) Secretary Alex Azar meant to curb high prescription drug costs. But it’s unclear whether any major biopharmaceutical companies are actually poised for self-imposed price cuts in the near future, or on what Trump is basing his claims.
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The so-called “American Patients First” blueprint released earlier this month poses a number of ideas for tackling the skyrocketing cost of medicines. Some of the proposals take aim at the medical supply chain, including ones that would change the way Medicare pays for certain treatments; others are far more aspirational and, on both a political and policy level, controversial (such as forcing foreign governments to pay more for U.S.-made drugs).
Largely, however, health care companies—and drug makers specifically—don’t seem particularly perturbed by the tough talk. The administration’s blueprint is still just that, and it contains far more questions about drug pricing policy than it does answers. Literally. And while some pharmaceutical firms have been testing out new payment models including pay-for-performance deals with health insurers in recent years, wherein they only get paid if their drugs actually work, list price increases for therapies that outpace inflation are still the norm and companies don’t appear to be bracing for radical disruption.
Food and Drug Commissioner (FDA) Scott Gottlieb and Centers for Medicare & Medicaid Services (CMS) administrator Seema Verma have joined Trump and Azar in targeting drug prices, with Gottlieb taking the step of naming-and-shaming companies that have been accused of preventing the entry of cheap, generic competitors to the market. Still, biotech stock indices rose between 1.4% and 1.8% in Wednesday trading, and the prospect of voluntary price cuts (rather than, say, a lower-than-usual price increase) for drugs may prove unlikely barring more aggressive regulatory steps.