Trump Wants To Lower Drug Prices But Faces Roadblocks

Controlling the cost of prescription drugs has been a primary focus of President Donald Trump’s administration since the beginning of his campaign, when he accused pharmaceutical companies of “getting away with murder.”

Despite his focus on the issue, drug prices have steadily risen over the past year. In the last six months alone, prescription drug prices have risen 10.5%, four times faster than inflation. The price increases are smaller for top drug brands at 3.1%, but are still substantial.

Drug pricing advocates like Jon Conradi, of the National Coalition on Health Care’s Campaign for Sustainable Rx Pricing, told POLITICO that these price increases, “underscore the urgency for bipartisan action in Washington to increase competition, boost transparency, and crack down on [the industry’s] egregious pricing practices.”

In response to the increased pressure from the Trump administration and other critics, pharmaceutical companies have changed pricing strategies. In the past, pharmaceutical companies raised prices twice per year, once at the start of the year then a subsequent midyear increase. Now, they have staggered these price hikes to avoid attention, according to Rx Savings Solutions CEO Michael Rea, whose company advises employers on how to reduce drug costs.

In response to these increases and shifting pricing strategies, President Trump has recently floated the idea of issuing an executive order that would lower drug prices so that they are in line with those of other countries. The focus of this order would be a “favored-nations clause,” a practice where a seller provides its buyers the same best terms it offers to others. This proposal has already met with criticism from the pharmaceutical industry, with some saying that introducing an “international pricing index” could spark a legal battle.

Previously, the Trump administration issued a rule that required drug makers to include the list prices of their medicines in television ads. This rule was recently struck down after Merck, Eli Lilly, and Amgen sued the sued the administration after the U.S. Department of Health and Human Services (HHS) finalized the rule in May, arguing that the agency lacked the authority to impose this rule without congressional approval.

With President Trump’s re-election campaign ramping up, he has said he will release a new health-care plan in next few weeks with the hope that it will be approved by a Republican held Congress in 2021.

Sources: POLITICO, July 1, 2019; The Washington Post, July 2, 2019; The Wall Street Journal, July 5, 2019; The Washington Post, July 8, 2019.