One solution President Donald Trump might easily find to reverse skyrocketing drug prices in the United States, from my point of view, is this: Hold pharmaceutical companies accountable through antitrust laws already on the books.
He could fine or even criminally prosecute those companies that continue to price-gouge consumers.
Sound extreme? It would be simple — and 15 U.S. Code (the Sherman, Clayton, and Robinson-Patman antitrust acts) Chapter 1 is sufficient to proceed. All Trump needs is an attorney general willing to prosecute.
It doesn’t appear, however, after a meeting between Trump and pharmaceutical executives on Capitol Hill on Tuesday, that anything is going to change. The pharmaceutical market sees no threat on the horizon, or their stocks wouldn’t have shot back up.
The above law was settled by the Supreme Court in 1979. The court ruled that McCarran-Ferguson, a law that exempts insurance companies from most antitrust regulation provided they are regulated by the states, does not extend to an “arrangement” for purchase of goods and services by insurers or pharmaceutical companies.
I would like a good reason why Gilead charges up to $100,000 for a drug the company didn’t even develop — Solvadi — and that costs $160 to make.
In layman’s terms: We all would pay the same low price for drugs and medical services. Then the monopolists in medicine would have a choice — lower prices, or criminal prosecution. No president, Republican or Democrat, has upheld the law since that Supreme Court decision in 1979, which is why we are in the position we are today.
The Obama administration did not enforce the antitrust laws against Big Pharma to stop price-gouging; it did not fulfill promises to allow the importation of drugs from abroad — despite campaign promises to that effect. I see no indication thus far that the Trump administration will either.
President Trump suggests that by making drugs here, we will bring back jobs and prices will drop. Drug production isn’t like making cars. It’s simpler and less labor-intensive. So I would like a good reason why Gilead charges up to $100,000 for a drug the company didn’t even develop — Solvadi — and that costs $160 to make.
Trump has been highly critical of the pharmaceutical industry throughout his campaign. Just a couple of weeks ago, he said that they’re “getting away with murder” when it comes to what they’re charging.
He met with CEOs of some of the biggest pharmaceutical companies this week. He is reportedly asking the companies to cut prices as well as manufacture more of their drugs in the United States. He is promising, in turn, to speed the approval of new medicines and ease regulation.
“We have to get prices down for a lot of reasons. We have no choice, for Medicare and Medicaid,” Trump said, according to a Reuters report, citing the nation’s government insurance programs for the elderly, the poor, and the disabled. He added that he felt foreign countries had to pay more for drug development costs — right now, the U.S. is shouldering most of that burden. “We’re going to end global freeloading,” said Trump.
What happens with the new antitrust investigation into Mylan NV, the maker of EpiPen, should be an indication as to how serious Trump is about change. Immigration laws are critical — but so are consumer protection laws.
My advice: Set a precedent that sends a shiver through the spines of Big Pharma executives. Enforce 15 U.S.C. with its massive fines and criminal penalties. This will get pharma to take this matter seriously.
Under Obama, when the banks violated federal law such as helping money launderers, the Department of Justice negotiated a financial settlement for just cents on the dollar of profit. If Trump takes this approach, it will only mean another expense charged back to the American consumer. Essentially, it will be a method of indirect taxation — which doesn’t help you or me or lower prices meaningfully.
Dr. Ramin Oskoui, a cardiologist in the Washington, D.C., area, is CEO of Foxhall Cardiology PC and a regular contributor to LifeZette.