He’s vowing to take on drug prices at home — but they could go up abroad
By SARAH KARLIN-SMITH and SARAH WHEATON
President Donald Trump wants Americans to get lower prices for medicines — and the rest of the world may pay for it.
His "America First" message on drugs at home, coupled with pro-pharmaceutical industry policies abroad, could lead to higher costs for patients around the world — without making drugs more affordable for those in the U.S.
Trump on Friday plans to deliver his long-promised speech on how to lower drug costs, addressing an industry he has in the past accused of "getting away with murder." Global health officials worry he will also target practices that keep medicines affordable in other countries.
Amid rising trade tensions between the U.S. and key trading partners, Trump and top administration officials have repeatedly blamed high U.S. prices in part on foreign countries that take advantage of the significant U.S. investment in medical research without paying their fair share. Many nations, including wealthy European ones, negotiate or regulate drug prices to keep them lower than what Americans typically pay.
“As part of President Trump’s bold plan to put American patients first, HHS is focused on solving a number of the problems that plague drug markets, including … foreign governments free-riding off of American investment in innovation,” Health and Human Services Secretary Alex Azar recently said.
He added that high drug prices can leave crucial medicines out of reach.
“There's little difference for a sick patient between a miracle cure that hasn't been discovered and one that is too expensive to use,” said Azar, a former executive at Eli Lilly, which has received its share of criticism for raising the price of medicines, including insulin.
Foreign governments and international advocates are struggling to reconcile Trump’s dual messages. He is making a populist call for affordability, but at the same time U.S. diplomats have been defending the industry’s prerogatives more than ever in trade negotiations and international gatherings.
Many European experts view the policies he is crafting on trade, patents, transparency and intellectual property rights as advancing the drug industry’s interests overall, affecting rich and poor nations alike. The United States can’t unilaterally change the sticker price on drugs abroad, but Trump’s administration can create a climate in which they are likely to rise.
“It’s hilarious. Trump is a businessman, and every businessman knows you charge what the market will bear,” said Suerie Moon, of the Global Health Centre, Graduate Institute of International and Development Studies in Geneva. “It’s a line that we have heard from [pharmaceutical] lobby groups, that if European countries would pay more, that would be a fairer situation, but I’ve rarely heard companies argue if Europe paid more, the U.S. pays less."
WHO to focus global attention on drug prices this month
Trump’s policies may play out in trade pacts like a revised NAFTA agreement, which is currently being negotiated, or in global forums like the World Health Organization, which will take up drug pricing at its May 21 annual meeting. WHO has nearly 200 member countries, but the U.S., which provides about a quarter of its budget, holds outsize sway.
Poorer countries have long struggled to pay for the latest drugs, but nowadays even richer Western European nations feel the pinch of five- and six-figure price tags on treatments for diseases like hepatitis C or cancer.
“The pharma pricing issue has really come to a breaking point,” said Ellen ‘t Hoen of the University of Groningen in the Netherlands and a former executive director of the Medicines Patent Pool, which secures rights to produce cheap copycats of drugs for poor countries. “There’s a real appetite for change.”
The White House declined to comment before Trump’s speech except to refer to the president’s past remarks and his administration’s economic reports.
U.S. Office of the Trade Representative spokeswoman Emily Davis said the aim is pharmaceutical trade policies that are transparent, nondiscriminatory “and increase fair market access for American innovators.” The White House Council of Economic Advisers issued a report in February that labeled “free-riding” from wealthy countries ”the root of the problem.”
Some trade policies the administration has favored, like keeping generics off the market longer than some public health experts advocate, could actually reduce competition for pricey biologics for diseases like cancer or rheumatoid arthritis. Delaying the marketing could also set back the emerging biosimilar industry, meaning less access to cheaper versions of these new therapies in the U.S. and abroad.
The Trump administration has gone after Colombia and Malaysia for taking steps that are legal under international agreements to skirt brand drug patents when public health needs necessitate lower-cost medicines, a forceful maneuver known as compulsory licensing, in which a country basically voids a patent so a cheaper generic can be made. The White House negotiated a South Korea trade deal that opened up its market to U.S. drug-makers.
And the U.S. drug lobby PhRMA cheered Trump for an April report from the U.S. trade office, which for the first time devoted a section solely to pharmaceutical intellectual property rights. The list did not ultimately include the European Union, despite PhRMA’s request that it be put on notice ahead of proposed changes to medical IP incentives, due later this month. However, the report did name-and-shame more than a dozen countries — including close partners like Japan and Canada — based on complaints about pharma patent protections.
Researchers at the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center empirically tested Trump's claim that the high U.S. prices are required to fund research and innovation. They found that drug companies earn “substantially more” than what the industry spends on R&D and concluded that drug-makers have room to lower U.S. prices without raising them overseas, and still maintain their R&D investments.
Waiting for copycat medicines
And critics say Trump’s international pharmaceutical agenda could have ramifications at home.
The “trade agenda doesn’t necessarily seem to be synced up with the access to affordable medicines agenda,” said Jeff Francer, senior vice president and general counsel of the Association for Accessible Medicines, a generic drug lobby.
He notes that if a renegotiated NAFTA deal grants pricey biologics 12 years of monopoly protection, not only would Mexico and Canada have to wait longer for cheaper copycat medicines but the U.S. wouldn’t be able to change its own law to get biosimilars to market sooner. That 12-year standard was put in place in Obamacare, but some Democrats have been pushing to shorten it.
Francer also pointed out the risks in Trump’s proposal to slap billions of tariffs on Chinese imports, including ingredients used to make finished medicines like insulin, antibiotics and vaccines in the U.S. While many financial analysts doubt the Chinese tariffs would have a big impact on U.S. prices, they do worry that the U.S. could spread this policy to countries like India that are more critical to the U.S. generic drug industry. The administration has already criticized India for imposing price caps on medical devices used to treat heart disease and has said it is looking at whether to revoke special import status India gets in the U.S. as a result.
President Donald Trump has brought the global pharmaceutical debate into the domestic dialogue. He’s gone to the American people and blamed other countries for high prices in a way that past presidents did not.