Which way for Trump and progressives on pharmaceutical reform?

Last January, to the astonishment of many, Donald Trump asserted that he favored allowing Medicare to negotiate with pharmaceutical companies over drug prices, a longstanding progressive policy that was also supported by the Democratic candidates. “We don’t do it. Why? Because of the drug companies,” Trump said.  

Will he pursue such a populist course on drug prices once in office? It seemed unlikely then. But now, it seems pretty clear that the promise was a bait-and-switch: his new website does not include a word about Medicare drug negotiations.

{mosads}Instead it calls for “[r]eform[ing] the Food and Drug Administration [FDA], to put greater focus on the need of patients for new and innovative medical products,” code words for a pro-Pharma agenda that would weaken the FDA standards for drug approval.

A similar pro-industry agenda was embodied in the 21st Century Cure Act that was passed by the House last year. As an article in the “New England Journal of Medicine” described, that act would “lead to the approval of drugs and devices that are less safe or effective than existing criteria would permit,” producing a windfall for the drug industry but greatly increasing the likelihood that unsafe medications would gain approval.

Drug company stock prices rocketed the day after Trump’s election, reflecting investors newfound confidence in the industry’s prospects under his presidency.

While the President-elect’s plans for the drug industry remain clouded, it will be difficult for him to dodge the issue, as a broad majority wants the government to take action on drug prices.

A Kaiser poll published last month found that 74 percent of Americans, including 68 percent of Republicans, believe that addressing the affordability of pricey drugs for chronic ailments must be a priority for the next government. And some 63 percent called for government action to bring down drug prices. 

It’s not surprising that people feel this way, for the U.S. is an outrageous outlier in terms of what we pay for drug spending, which was $1,026 per capita in 2013. This is compared to the Organization for Economic Cooperation and Development (OECD) average of $515.

Meanwhile, widely-publicized examples of price-gouging for decades-old generic drugs — like that pursued by Mylan pharmaceuticals or Martin Shkreli — have rightfully enraged the public, while also giving the lie to the proposition that drug prices are high only because of R&D costs.

Yet the problems with the drug industry go beyond the exorbitant prices they charge. In recent years the industry hasn’t been producing many innovative new drugs. Too often they’ve focused on so-called “me too drugs”— newly patented drugs that cost more yet do nothing better than existing medicines.

Such drugs produce windfalls for the drug industry but do little to improve health, and too much of drug companies’ R&D spending is wasted on developing these expensive, duplicative therapies. 

What direction will Trump take? The dishonesty of his campaign rhetoric suggests that, once in office, he will ditch his populist promise to take on Big Pharma, and close ranks with his fellow billionaires.

In response, progressives need a clear and bold strategy on prescription drugs. A weakening of FDA standards for drug approval should be strongly opposed as a giveaway to Big Pharma, a position which seems to have majority support.

At the same time, Trump’s feet should be held to the fire on his promise to support Medicare drug negotiations with Pharma, a policy that would save the federal government at least $230 billion and as much as half a trillion over 10 years, according to the Center of Economic and Policy Research, a liberal think tank.

However, it would be a major mistake to react to bad ideas on drugs coming from the Congress or president without offering a countervailing vision. Even though the current political climate is entirely adverse, a positive blueprint for Pharma reform could help to shift the terms of the debate.

For instance, we could get even bigger savings — at least $1.5 trillion over the next decade — if we brought all drug prices, not just Medicare’s, in line with the prices paid by other high-income nations (excluding the portion of current drug spending that is already discounted. 

The obvious route to achieving these savings would be to have a single payer directly negotiate with drug firms, as occurs in many European nations.

Apologists for Big Pharma will claim that high US drug prices are necessary to sustain spending on R&D. But their numbers simply do not add up. The “excess” $150 billion we spend on drugs in the US each year is more than double the industry’s own estimate of total US private sector pharmaceutical R&D spending (in 2010, the lobbying group PhRMA put total private sector R&D at $67.4 billion annually).

If drug prices were lowered to OECD levels, some of the $150 billion in savings could be re-invested into public sector drug R&D, which could be directed at real health needs, not potential profits. Publicly developed and tested drugs could then be kept in the public domain and produced as generics from day one.

Some of the $150 billion in savings could also be used to expand drug coverage and eliminate the copayments that deter many from taking necessary, and even life-saving medications.

Americans today are suffering from high drug prices, whether they pay for them out-of-pocket or through high and rising premiums. Meanwhile, multimillionaire pharmaceutical CEOs, like Gilead’s CEO — who raked in more than $1 billion while heading the firm — profit from our government’s longstanding policy of generous corporate welfare for the pharmaceutical industry.

These are winning political points. In contrast, shilling for Big Pharma much less throwing the uninsured out of hospital beds and into the streets (figuratively speaking) — is unlikely to boost Republicans’ popularity. Progressives absolutely need to relentlessly hammer — and defeat — their reactionary, immoral healthcare agenda. But we also need to present a vision of a better alternative that could take its place, knowing that inevitably, the political tide will turn, if not a day too soon.

Adam Gaffney is a physician and a writer who focuses on healthcare policy, politics, and history. He is also an Instructor in Medicine at Harvard Medical School, a practicing pulmonologist and critical care doctor, and a board advisor to the organization Physicians for a National Health Program.


The views expressed by contributors are their own and not the views of The Hill. 
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