Presidential candidate Trump tweeted regularly on the promise that he’d reduce drug prices and that drug companies will have no option but to reduce their prices once he became president. As president, Trump has continued tweeting but with little to show in terms of regulatory effort or polices that have actually reduced drug prices. As a matter of fact, drug prices have gone up again under Trump’s friendly administration relationship with big pharma. But Trump’s understanding of market conveyances like much of his understanding of how policies or processes works, is not steep in logic but rather perception.
Trump has failed to understand that the primary justification for increase in drug prices can be attributed to both the newness of the drugs and how drug’s patents are protected and regulated.
For example, Americans have consistently seen a steady increase in drug prices over the years. Pfizer, one of the biggest pharmaceutical companies came out with a new drug for breast-cancer called Ibrance. To Pfizer’s surprise a competitor also came out with a rival drug but increased their drug to closely match the competitor’s price at a cost of $9,850 per month for a treatment. Ibrance is to be taken for example “for 21 days at the same time each day, with food, then you stop taking the Ibrance pills for 7 days.” Patent protected drugs like Ibrance and Viagra are good examples of how when drugs are first introduced to the market how expensive they can be for patients. A recent article by Vox discusses how the life span of drug prices differs significantly from the inception of the drug, to when the drug has reached its patent expiry, to an increase in sales, to lost patent (see below diagram) for more explanation.
When Viagra was first introduced to the market, the price for a bottle in 1999 was roughly $700 dollars. In 2009 that same bottle cost $1438. In 2018 that same bottle is now between $73 to $88 dollars. The reason for the decrease is attributed to a combination of many factors such as, the introduction of generic brands like Cialis and Vardenafil to the market and the European Commission in 2007 approved a low doses of tadalafil (Viagra) for ED therapy.
Of course one could argue that the high drug prices in the US cannot be justified if other countries for example, the UK sell the same drugs but at a lower price. For example, the drug Humira is also offered here in the US and also sold in Switzerland. The price of the drug in the US is roughly $3000, while it’s half that in Switzerland at roughly $1500. For an impact on healthcare with respect to costs, access and quality, the question is why? The answer, is that the United States of America heavily regulates the pharmaceutical industry and thus drug prices are more of a result of regulatory response that anything else. The European government controls prices in ways unlike the US, while in America pharmaceutical companies set prices. A key note is that the drug companies biggest customers are Medicare recipients.
Trump’s tweets have aggrieved the reality behind why drug prices are so high and have given the impression that a tweet from a president could impact drug prices absent congressional and regulatory intervention. As much as Trump’s negative tweets might have temporarily affected the stock prices of certain private companies, for example “Amazon’s” when he publically admonished its CEO Jeff Bezos, for being anti-Trump, the Trump effect has proven to be more bark than bite that’s akin to a traveling sales man empty promises. Trump has gone on to make promises on many occasions that drug companies will reduce their prices soon, but has not given a time frame or a reason why companies would reduce their prices, if it’s not in their shareholder’s interests. The misguided tweets from Trump actually hurt real people who believe the president’s tweets are a meaningful policy or strategy that could actually reduce drug prices.
Unless, Trump’s ego is kept in check with reality, healthcare costs will continue to rise, absent a solution through congressional and regulatory fixes. The increase in drug prices will continue, and the impact will be felt in healthcare by consumers mostly, as access, affordability and quality will force Americans to seek cheaper more affordable and accessible drugs across international lines.