skip to main content
Close Icon

This website uses cookies. By continuing to use this site, you agree to our use of cookies. To find out more visit our Cookie Policy page.

Global Search Configuration

Executive Summary

Medicare price negotiation is not a new idea – nor is the concept of using the Presidential megaphone to talk down drug prices. Will Trump and Twitter turn it into something bigger?

 

The immediate reaction in industry to the election day sweep by Republicans (beyond surprise at the unexpected victory of Donald Trump) was a sense of relief: the potential for an all-out battle over drug pricing policy seemingly fell by the wayside. (Also see "Trump Win Is False Security For Drug Makers, Allergan CEO Warns" - Scrip, 1 Dec, 2016.)

 

Trump’s comments on drug pricing during the transition – first in a Time “Man of the Year” interview published shortly after the Election, then in his first press conference Jan. 11, and again in an interview with the Washington Post published Jan. 16 – underscore the more complicated reality: the populist Republican President isn’t backing down from claims that he will drive down drug costs. (Also see "Trump Makes A Nasty News Day For Pharma – But What Will It Really Mean?" - Pink Sheet, 11 Jan, 2017.)

 

Simply put, based on his public statements, Trump does not fundamentally differ in his views on drug pricing from his Democratic opponent (Hillary Clinton) – nor from his predecessor in the White House, Barrack Obama.

 

Like his predecessor, Trump says he favors Medicare price negotiation. Hearing a standard Democratic talking point coming from a Republican President is certainly reason for concern in industry. But it doesn’t change the reality that there is no simple way to implement systemic price negotiation in Medicare, given the structure of the Part D benefit. (See sidebar for related story.)

 

At the same time, it is also true that there is nothing to stop a suitably motivated Administration from finding ways to drive down prices one product at a time.

 

When “price negotiation” first became a rallying cry for Democrats, in fact, they cited actions by the GOP Administration under George W. Bush to “negotiate” a lower price for the antibiotic Cipro. That was a unique and complex story, but does illustrate the broader point: the bully pulpit is a powerful tool, one that can work even where laws are vague and uncertain. (Also see "Putting the Bully in the Bully Pulpit: The Democrats' Plan to Cut Drug Prices" - Pink Sheet, 1 Feb, 2007.)

 

Twitter attacks may be more efficient (and certainly more concise) than a series of Congressional hearings or a national coverage analysis, but many sponsors have learned that the lack of legal mechanisms to set prices does not mean that the federal government can’t intervene in specific cases – as Turing Pharmaceuticals AG, Valeant Pharmaceuticals International Inc. and Mylan NV can attest.

 

Or, go back further and ask KV Pharma (Makena) or Dendreon Corp. (Provenge) or Idec Pharmaceuticals Corp. (Zevalin). If you can find them.

 

The fear of Trump using the bully pulpit of the White House to force companies to cut prices is very real. However, unlike so much about the Trump Administration, it isn’t really new. In fact, it is something of an American tradition.

 

From the editors of The RPM Report.

 

Read more content on the US election here.

 

 

Read also

  • Biomedtracker: follow the drug development process

    Accurate, Intuitive and Updated In Real Time

    03 Apr 2017

    Learn why pharmaceutical, biotech, and investment companies rely on BioMedTracker for its insight on the likelihood of approval, commercial potential, and future data and regulatory catalysts for drugs within the competitive landscape of every important disease and indication.

  • Biomedtracker: follow the drug development process

    Report Extract: Q3 2017 Outlook Report

    17 Jul 2017

    In this report, we cover catalysts from 21 drugs expected to occur in Q3 2017. For each drug, the likelihood of Phase/PDUFA review success and overall Likelihood of Approval (LOA) given their particular phase, drug class, and disease group are provided.

    Topics Alzheimers Cancer Drug approval

  • Scrip: industry news and insights

    Bayer Bets On Oncology Pipeline Vows To Increase 2017 R&D Budget

    By Lucie Ellis 22 Feb 2017

    Bayer has launched an internal oncology R&D unit to speed up development of its pipeline cancer therapies and ensure the company is first to market with its late-stage treatment candidates, head of pharma Dieter Weinand told Scrip on the sidelines of the pharma's annual results conference.

    Topics Cancer $name

;

Next steps

Whether you’re a small biotech start-up, research firm, generic manufacturer or a global pharmaceutical giant, you need focused, independent insight and opinion on market developments.

Our team is always happy to hear from you. Please call us at:

  • US Toll-Free  : +1 888-670-8900
  • US Toll           : +1 908-547-2200
  • UK & Europe : +44 (20) 337 73737
  • Australia       : +61 2 8705 6907
  • Japan            : +81 3-6273-4257

Or email us your inquiry, so we can provide you the best possible customer service:
pharma@informa.com

Have an immediate and specific information need?

Browse and buy from 1000s of analysis and research reports now: