Trump: Other nations extort drug-makers

Trump: Other nations extort drug-makers

US President Donald Trump has accused foreign governments of extorting “unreasonably low drug prices” from pharmaceutical firms.

Speaking in Washington on Friday, he said he had directed his top trade official to make the issue a priority in trade talks.

“It is time to end the global free loading once and for all,” he said.

The president is under pressure to deliver on campaign promises to reduce the high costs of prescription drugs.

In his speech, the president partially blamed the high prices on price controls in other countries that he said “extort unreasonably low prices” from companies, forcing Americans to pay more to “subsidise the enormous costs of research and development”.

“That is unacceptable,” he said.

However, experts say foreign pricing is not a major influence on US costs and changing it will not help Americans.

“The notion that if other countries pay more for drugs that US consumers will pay less, that’s just not true,” said Paul Ginsburg, a professor of health policy at USC and the director of the USC-Brookings Schaeffer Initiative for Health Policy.

Mr Ginsburg said firms set prices to maximise profits and already have ample incentives to innovate.

“If they are able to get other countries to pay more, I don’t believe it will have any effect on prices in the United States,” he said. “It will only raise drug company profits.”

Shares of health care companies jumped after the speech.

Higher costs

Polls repeatedly find that reducing the high cost of prescription drugs is a priority for American voters.

The US spent $1,443 per capita on pharmaceutical costs in 2016, compared to a range of $466 to $939 in 10 other high income countries, including the UK, Australia, Canada and Japan, according to a study in the Journal of the American Medical Association.

The report said those costs were one of the primary drivers of overall US health spending, which was nearly twice as high as in the other countries.

President Donald Trump seized on the issue during his 2016 election campaign.

At the time, he had said the government should negotiate drug prices for government health programmes, such as Medicare. He also voiced support for allowing people to buy medicines from countries where they cost less, such as Canada.

Neither of those proposals was mentioned in Friday’s speech.

Details of the plan

The White House said its focus is on increasing competition among drug manufacturers, by speeding up approvals for generic drugs and cracking down on the “gaming” of intellectual property patents.

A blueprint released on Friday also calls for requiring disclosure of out-of-pocket costs prior to giving prescriptions and for ending rules that limit what pharmacists can share about costs, among other measures.

Gerard Anderson, a professor of health policy at Johns Hopkins University said it is too early to say whether the ideas will have an impact on prices, and too early to gauge their political effect.

“I don’t know how the American public is going to respond,” Mr Anderson said. “It clearly does not meet what President Trump said he was going to do when he was elected.”

He also said he does not think making drug prices a focus of trade talks will lead other countries to make changes.

“I don’t expect that any country is going to say, ‘Oh, we’re going to increase our prices because President Trump wants it’,” he said.

Source: BBC News

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