Time to Get Tough on Drug Prices

June 20, 2017

 

Even the most stubborn companies—drug manufacturers and pharmacy benefit managers—are now acknowledging that high drug prices are a big problem. It is clear that half measures will no longer help struggling patients. What we need is substantive, meaningful reform that will hold Big Pharma accountable and reduce drug costs for all Americans.

 

This makes the new article on the Trump administration’s executive order to reduce drug prices so disappointing. We hear that the executive order is likely to be very favorable to drug companies, and unlikely to lower prices And since on the campaign trail Trump said drug companies were “getting away with murder”, this contrast is all the more appalling.

 

Over the last few weeks, a number of Trump administration officials have been meeting in what they call “the Drug Price and Innovation Working Group.” It includes Joe Grogan, associate director at the Office of Management and Budget, FDA Chair Scott Gottlieb, OMB Director Mick Mulvaney and Secretary of Health and Human Services Tom Price.  Earlier reports said the members were unwilling to take steps that might anger the pharmaceutical industry or other large companies.

 

According to Business Insider, these reports are well founded. The proposed executive order has several components: 1) it would extend overseas patents, giving drugmakers longer exclusive periods before generic drugs come to market, 2) it would make changes to regulations and drug reimbursements in order to promote competition, 3) the order might endorse/promote value based pricing, where prescriptions are paid for based on how well they work, 4) and the order might promote leniency on clinical trials.

 

The order contains no references to Medicare negotiating lower drug prices, or importing cheaper drugs from abroad, or combating price gouging by companies—all powerful reforms that lower drug costs and improve the lives of millions of Americans.

 

Even more disturbing is that some of the text in the working group’s documents has been directly taken from papers written by the Pharmaceutical Research and Manufacturers of America (PhRMA), the chief lobby for drug companies. This makes it unlikely, to say the least, that the executive order will strongly combat drug prices. Kaiser Health News looked at the proposals and concluded that they will not reduce drug costs; a professor described them as “token gestures.”

 

And Joe Grogan, one of the chief participants on the order, spent the last five years working at Gilead Sciences as the head of federal affairs. Gilead is the drug company that helped ignite the debate over drug prices; in 2013 it set the price of a new hepatitis C treatment at over $80,000. Mr. Grogan does not have a White House ethics waiver, so he is supposed to recuse himself from issues he has lobbied on in recent years. He has not recused himself from this order, despite the fact that he has clearly lobbied on drug prices recently.

 

It is time to get tough on drug prices. Americans deserve meaningful action on this issue, not token gestures.

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