Pharmaceutical companies wondering where President-Elect Donald Trump stood on drug pricing issues got their first real taste on Wednesday.
During his news conference with reporters in New York, Trump said pharmaceutical companies are “getting away with murder” in what they charge the government for medicine. He promised things would change.
“We’ve got to get our drug industry back,” said the president-elect. “Our drug industry has been disastrous — they’re leaving left and right. They supply our drugs, but they don’t make them here, to a large extent. And the other thing we have to do is create new bidding procedures for the drug industry because they’re getting away with murder.”
Trump noted the U.S. is the world’s largest buyer of drugs in the world — yet if we don’t start bidding properly on them, we’ll miss out on billions of dollars’ worth of savings.
“When the president-elect says we’re going to negotiate drug pricing, you have to take that seriously, but at the same this is a complicated issue because there’s not going to be clarity on drug pricing reform anytime soon,” Brad Loncar, manager of the Loncar Cancer Immunotherapy ETF (CNCR.O), told Reuters.
However, Dr. Ramin Oskoui, a Washington, D.C.-based cardiologist and contributor to LifeZette, believes this is one area of health care where change and savings could come easily.
“Medicaid, the program for low-income people that is administered by the Centers for Medicare and Medicaid Services and the Department of Veterans Affairs, is able to negotiate with drug companies for lower prices,” Oskoui wrote in an article for LifeZette. “In fact, under federal law, drug makers must provide a discount or rebate equal to at least 15 percent of the average manufacturer price for most brand-name drugs covered by Medicaid.”
He added, “Federal law also guarantees discounts for the Department of Veterans Affairs, which can negotiate with drug makers to secure discounts on top of those guaranteed by law. Generally, they are able to negotiate prices that are at least 25 percent lower than Medicare.”
Prescription drug spending is estimated to have accounted for 16.7 percent of $2.729 trillion spent on health care in the U.S. in 2015 alone. Drug costs, according to Oskoui, are increasing at a far greater rate than costs for hospital care or physician fees. And not only do Americans pay the highest prices for prescription medications of any developed country, “our representatives and pharma lobbyists have made it illegal to purchase drugs from abroad.”
Late last year, Trump suggested easing laws to allow for importing medicines so that Americans might benefit from the low prices paid by consumers abroad. “This could easily shave more than $100 billion from the $375 billion Americans spend yearly on prescription drugs,” said Trump.