Trump's Crusade Against Sky-High Drug Prices
U.S. President Trump Advocates for Lower Drug Prices, Casting European Pharmaceutical Firms in a Troubled State
Donald Trump is turning up the heat on pharmaceutical companies to slash the ridiculously high prices of drugs in the United States. His latest move comes as an executive order targeting foreign price negotiations and the powerful pharmaceutical lobby.
As per "dpa" reports, the U.S. government is eyeing measures against foreign price negotiations deemed unfair. The pharmaceutical sector in the U.S. thrives off these high prices, making reforms a daunting task.
Trump is demanding that pharmaceutical companies and foreign governments lower drug prices in the U.S., which primarily cater to American patients. He says, "We're subsidizing other countries' healthcare." Americans have been getting fleeced for far too long.
The effectiveness of Trump's strategies remains to be seen given the political and legal adversity that lies ahead. During his first term, Trump attempted to tackle high prices, but ultimately failed.
Europe Slammed as More Shameless than China
"I'm not making the biggest accusations against pharmaceutical companies," said Trump. However, he didn't hold back when criticizing European countries, labeling their socialist healthcare systems as a drain on American patients. Trump accused the European Union of behaving "more shamelessly than China" in price negotiations. Moving forward, Europe can expect to pay more – while America pays significantly less.
Trump's executive order relies on the principle of "Most Favored Nation," a strategy that he attempted to introduce during his first term. The U.S. will no longer pay more for certain medications than the country with the lowest global price, regardless of market size or economic power. "This game is over," Trump declared, referring to countries that have benefited at the expense of the U.S.
The Pharmaceutical Industry Under Siege – Consequences for Patients?
The U.S. president's announcement has put the pharmaceutical industry under scrutiny. Han Steutel, president of the Association of Research-Based Pharmaceutical Companies (VFA), warns that the U.S. is the most important market for innovative medicines. Without U.S. revenues, research and development, and new therapies may not be feasible for European patients.
With an international reference to the lowest price, research costs could struggle to be covered, and market introductions might become increasingly questionable, according to Steutel. A stronger, common EU market with a coordinated pharmaceutical policy is needed, Steutel suggests.
Simon-Kucher, a consulting firm, anticipates significant impacts on the global pharmaceutical industry and German companies. The declining profit margin poses a threat to funds for research, production, and jobs, including at German locations.
U.S. sales decreases could force companies to increase prices in other industrial nations, like Germany. Furthermore, pharmaceutical companies may avoid entering the German or European market to protect U.S. pricing, according to Simon-Kucher.
To bring Trump's decree to life, several U.S. agencies will be involved. The Commerce Department will challenge foreign pricing policies deemed unfair, such as state-set maximum prices that disadvantage U.S. companies. The Health and Human Services Department will facilitate direct sales of drugs to U.S. consumers at lower prices. The Food and Drug Administration will also examine the possibility of permitting imports from additional industrial countries in the future. Export restrictions are under discussion, the White House reveals.
Within 30 days, the Health and Human Services Department is expected to set specific price reduction targets. Based on these targets, the government will negotiate with the pharmaceutical industry. If the industry does not cooperate and lower prices voluntarily, further measures are planned.
The focus will be on drugs with significant price differences between the U.S. market and abroad. Specific medications or product groups have not yet been named. However, there's no indication of restricting certain drug groups, according to government statements.
A Lobby with Influence – Across Party Lines
Trump accused the pharmaceutical industry of having too much political influence. He described the lobby as "probably the most powerful in the world." Trump also criticized the Democrats for shielding the industry for years.
Indeed, the pharmaceutical industry is one of the most influential in Washington. With targeted donations – to both Democrats and Republicans – the industry ensures a voice in legislation. Attempts at drug price reform often face bipartisan resistance, often citing potential impacts on research and innovation.
The cost of drugs is a persistent issue in the U.S. Unlike many other industrial countries, there's no central state price regulation. Prices are largely controlled by pharmaceutical companies, leading to significantly higher costs than in Europe. In contrast, Germany follows various forms of state control in pricing.
dpa/lo
Insights:
- Prices Across the Globe: The U.S. has significantly higher drug prices than many other industrialized countries. This can put pressure on other countries, like Germany, to align prices with the U.S. to keep their citizens competitive in the global market.
- Powerful Lobbying in Washington: The pharmaceutical industry is one of the most influential lobbies in Washington, often protecting its interests in legislation and making drug price reform challenging.
- Impact on Innovation: The proposed drug price reform aims to minimize negative impacts on pharmaceutical innovation due to the maximum fair price (MFP) mechanism under the Medicare Drug Price Negotiation Program. This could influence how pharmaceutical companies allocate resources for research and development.
- The U.S., under President Trump's drive, is targeting foreign price negotiations deemed unfair, which could potentially affect pricing in health-and-wellness sectors globally, including Europe.
- In his pursuit to lower drug prices, Trump has accused the European Union of acting more shamelessly than China in price negotiations for healthcare, hinting at higher costs for European patients.
- Trump's executive order relies on the principle of "Most Favored Nation," a strategy that aims to prevent the U.S. from paying more for certain medications than the country with the lowest global price, affecting the finance and business sectors of both the U.S. and foreign countries.
- The pharmaceutical industry, recognized as one of the most powerful lobbies in Washington, exerts significant influence on policy-and-legislation, often shielded from regulations that could impact its profits, such as price reforms. This situation, persisting across party lines, has been criticized by Trump as a challenge in bringing about general-news changes in the health-and-wellness sector.
