On Drug Prices, President Trump Knows Better Than Candidate Donald | Stock News & Stock Market Analysis

In his State of the Union address, the President promised that drug prices “will come down” very soon. This isn’t fake news.


As always, actions speak louder than words. The administration has succeeded in speeding up the drug approval process and has brought additional transparency to both the FDA review process and the drug supply chain. These moves will result in broader access to less expensive medicines for patients.

FDA Commissioner Scott Gottlieb has cut red tape and bureaucratic inefficiencies at the agency. As a result, the FDA approved a record number of generic drugs in 2017. New drug approvals also hit a two-decade high.

Dr. Gottlieb has also supported advances in “adaptive clinical trials,” which allow medical researchers to adjust drug trials in real-time, rather than start from scratch each time they make a discovery. This will shave years off the approval process and reduce research and development costs — thereby making R&D (a very high-risk investment) more attractive to both start-up and established companies.

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More research will ultimately result in more drugs on the market and manufacturers will have to discount their medicines to win market share.

President Trump has made good on his promise to provide the FDA with the resources it needs to speedily review drug applications for both new and generic medicines. Last summer, he reauthorized the Prescription Drug User Fee Act, which allows the FDA to charge drug makers over $2 million per application. These fees enable the FDA to hire enough scientists to reach decisions about new drugs more expeditiously.

The administration is also poised to crack down on useless, costly middlemen in the drug supply chain. Pharmacy benefit managers, for instance, negotiate big discounts and rebates from drug makers — and then pocket them. Due to a lack of transparency about the secret rebates they receive, they often don’t pass these savings along to patients.

Officials at the Department of Health and Human Services have proposed requiring additional disclosures about these rebates and mandating that PBMs share the savings with patients. The proposed rule would drive down costs for Medicare beneficiaries by $10.4 billion.

The Trump administration isn’t just working to bring prices down. It has also sensibly backed away from some counterproductive ideas that candidate Trump floated during his campaign.

For instance, he wanted the government to directly negotiate the price of drugs covered by Medicare Part D, the prescription drug program for seniors.

Currently, private insurers sponsor Part D plans. They conduct their own negotiations with drug makers. Manufacturers give sponsors steep discounts to ensure their drugs are included in Part D plans.

Part D plan sponsors already obtain the maximum possible discounts. The nonpartisan Congressional Budget Office has repeatedly said that government negotiation would have a “negligible effect” on Medicare drug prices. The only way the government could cut prices further would be to exclude certain high-cost medicines from Part D plans. Beneficiaries would miss out on lifesaving treatments.

Candidate Trump also toyed with importing cheaper foreign drugs into the United States. That, too, was a terrible idea. The FDA can’t vouch for the safety of imported drugs. Given that one in ten medicines worldwide is counterfeit, the safety risks far outweigh any savings. And the Congressional Budget Office has calculated that such a scheme would reduce costs by 0.01%. That’s pretty poor risk/benefit proposition.

Importation would have also discouraged companies from pursuing new lines of research. It costs $2.6 billion to bring a single new drug to market. If patients could buy price-controlled drugs from abroad, research companies would struggle to recoup their investments and fund future projects.

President Trump says cutting drug prices will be a “priority issue” in 2018. His administration is already working to save patients money by speeding drugs approvals and cutting out deceptive middlemen. Now that’s something to tweet about.

  • Pitts, a former FDA associate commissioner, is president of the Center for Medicine in the Public Interest.

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Originally posted 2019-09-19 23:10:42.


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