Trump Moves Quickly on Pledge to Contain Drug Prices – but Can He Do It?

Trump Moves Quickly on Pledge to Contain Drug Prices – but Can He Do It?

REUTERS/Jacky Naegelen

Less than two weeks into his administration, President Donald Trump on Tuesday summoned the heads of many top drug manufacturers to the White House in a first step towards making good on his campaign pledge to crack down on soaring drug prices that have dramatically driven up the costs of Medicare, Medicaid, and employee health programs.

He also pledged to speed up Food and Drug Administration approval of cutting-edge drugs for treating cancer and other life-threatening diseases. “We have to do better at accelerating cures,” he declared.

Related: Trump Jolts the Pharmaceutical Industry with Vow to ‘Bring Down Drug Prices’

Trump complained recently that the major drug companies were “getting away with murder” by gouging consumers and the government. And at the top of his first bargaining session with pharmaceutical industry executives and lobbyists, the president complained about “astronomical” drug price increases.

“We have to get the prices way down,” Trump told the CEOs of Merck, Amgen, Eli Lilly, Novartis and Johnson & Johnson, as well as the head of the trade organization PhRMA. "We have to get prices down for a lot of reasons. We have no choice, for Medicare and Medicaid, we have to get prices way down.”

While providing few specifics with reporters and cameras in the room, Trump outlined what is likely to be the heart of his strategy for overhauling  U.S. prescription drug industry practices: Jawboning companies to moderate future hikes in drug costs under the threat of government sanction; encouraging competition through government deregulation and tax breaks; pressuring  multinational drug companies to bring jobs back to the U.S., and cutting the time it takes the FDA to approve new drugs by months or even years.

"We’re going to be cutting regulation at a level nobody's ever seen before," Trump said in the meeting with executives. "You can’t get approval for the plant and then you can’t get approval to make the drug, other than that you’re doing fantastic," he said.  

Related: How Big Pharma Lobbyists Keep Medicare Drug Prices High

Reforming the FDA “to put greater focus on the need of patients for new and innovative medical products” was a key provision of Trump’s campaign health plan. Trump said today that too often, the FDA has been overly cautious in approving new drugs desperately needed by sick patients – sometimes resulting in unnecessary deaths.

Congress last November approved the so-called 21st Century Cures legislation that earmarks $6.3 billion of biomedical research, opioid abuse prevention and support for the FDA in overseeing the safety of drugs. The new law also contains a handful of provisions to ease the requirements for drug manufacturers seeking government approval to sell their products. Trump says he wants to go much further.

"You're going to get your prices either approved or not approved," Trump told the executives. "But it's going to be a quick process. It's not going to take 15 years." (It's not clear what Trump meant by prices being approved since the government does not negotiate drug prices.)

Whether it all turns out to be political window dressing or a serious reform effort remains to be seen. Much of what Trump said was more rhetorical flourishes than specifics. And little can be done to flesh out his proposals until Rep. Tom Price (R-GA), Trump’s choice to head the Department of Health and Human Services, and a new head of the Food and Drug Administration are in place.

However, as Trump demonstrated with his initial flurry of executive orders on Obamacare, immigration and building a wall along the southern border, he is determined to quickly turn campaign promises into concrete policy.

Some of the drug company CEOs expressed interest in working with the new White House on drug pricing issues as the meeting was beginning. And the National Coalition of Health Care, a group of dozens of medical groups, insurers and consumer advocates, hailed the meeting as an important first step in addressing the drug pricing issue.

“We applaud President Trump for making the out-of-control prices of prescription drugs a priority in his Administration,” John Rother, the president and CEO of the coalition, said in a statement.

“Increased competition in the prescription drug market, real transparency into the drivers of drug prices, and ensuring that prices are linked to the value they provide are what will deliver lower prices for hardworking American families,” he added. “We look forward to working with Congress and the Administration to ensure that all patients are able to obtain lifesaving medications at prices they can afford.”

Related: Two Big Reasons Prescription Drug Prices Are So Much Higher in the US

Prescription drug prices have risen at a double-digit rate in recent years and are projected to continue to rise at that clip this year. Over the past two years, the country has been wracked by outrageous cases of price gouging by pharmaceutical companies by as much as 1,000 percent to 5,000 percent for some life-saving drugs.

Some of the worst offenders include Mylan Pharmaceutical, maker of the EpiPen drug dispenser for allergic children; Gilead Sciences, a manufacturer of two biometric wonder drugs for treating the Hepatitis-C virus, and Turing Pharmaceutical, formerly headed by Martin Shkreli, the notorious hedge fund manager. None of those companies were invited to the White House session.

Trump first highlighted his concerns about skyrocketing drug prices in September 2015 when he lashed out at Shkreli for raising the price of a 62-year old drug from $13.50 to $750 per pill. "He looks like a spoiled brat to me," Trump told reporters at a press conference in South Carolina. 

Perhaps as a shrewd bargaining tactic going into his meeting with drug company CEOs today, the former billionaire real estate businessman held back on his toughest ideas that were aired during the campaign. That may have been a bargaining tactic to use as leverage in extracting future concessions.

Related: The Feds Finally Make a Move on Soaring Drug Prices

One idea would be to allow the importation of cheaper drugs from Canada to enhance competition. Trump and Democratic presidential nominee Hillary Clinton both advocated that change, despite strong opposition from the drug industry.

Another would permit Medicare officials to negotiate down prices with major drug companies by eliminating a non-negotiation ban contained in the 2003 Medicare Part D drug legislation. That prohibition provided major pharmaceutical companies with billions of dollars in windfall profits.

Some analysts say Medicare, the premier health program for the elderly, could save more than a half trillion dollars over the coming decade by tough negotiations with drug companies.

PhRMA and its long-time GOP allies on Capitol Hill have fought for years to preserve that ban on negotiating drug prices for the national health care program for seniors and are digging in again to block efforts to repeal the restriction.

Related: Trump Might Adopt a Democratic Plan to Crack Down on Drug Prices

However, Trump says he is determined to shake up the status quo – even at the expense of his Republican allies on Capitol Hill. And he has begun conferring with a prominent senior House Democrat, Rep. Elijah C. Cummings of Maryland, who along with Sen. Bernie Sanders (I-VT) have waged war with the drug companies for years and co-sponsored one of the toughest price control bills in Congress.