Donald Trump’s Big Pharma Showdown Ends with a Whimper

It is difficult to find things on which Donald Trump and Bernie Sanders agree, but a consensus point is that pharmaceutical companies have been tearing up for Americans for a long time by invoicing exorbitant prices for prescription drugs. “The Americans are screwed up, and it’s not good. They are not going to bear it,” said Trump in February during a White House event. In May, he published a decree declaring that the administration would impose prices below Fiat if the drug manufacturers had not aligned their American prices with what they charge in other countries. “I agree with President Trump,” Sanders said in a statement. “It is an indignation that the American people pay, by far, the highest prices in the world for prescription drugs.”

In addition to threatening to introduce price checks, the Trump administration was preparing the way for drug prices and their ingredients, many of which come from abroad. Wall Street paid attention to these threats. Between the Trump elections last November and early April, a period during which the stock market increased sharply, drug stocks fell by about twenty percent. It was then. Last week, the president, next to the CEO of Pfizer, Albert Bourla, announced plans for a website managed by the government, Trumprx, on which Pfizer would list some of his drugs at reduced prices up to ninety-five percent. An information sheet from the White House said that the Administration and Pfizer, the fourth largest pharmaceutical company in the world, out of income, had concluded an agreement to “bring the American prices of drugs in accordance with the less well paid by other developed countries (known as the most favored nation, or MFN, PRICE).” Wasn’t it more bad news for drug manufacturers? Investors did not think it. In two days, Pfizer’s actions increased by fourteen percent. The actions of other pharmaceutical companies have also increased sharply on forecasts that they would conclude similar agreements. At the end of the week, the index S. & P. ​​Pharmaceuticals Select Industry had exceeded its summit in November.

A more in -depth inspection of the Pfizer agreement shows that Trump turned out to be a paper tiger. “It’s a lot of nothing,” said Craig Garthwaite, director of the Kellogg School of Management health care program in Northwestern. “For most people, it will have very little effect on drug prices.” Rena Conti, an economist and expert in the biopharmaceutical industry working at the Boston University School of Business, published a similar evaluation: “The first line is: it is a victory for Pfizer, but not a victory for American patients.” Rather than radically restructuring the pricing and distribution of drugs, the agreement has been “playing on the edges,” she said.

In the American pharmacy industry, practically everything that preserves the status quo is a victory for large pharmaceutical companies, which, according to a study of the Journal of the American Medical AssociationHas a net profit margin of 13.8% against 7.7% for S. & P. ​​500 companies in other sectors. Years ago, I asked a senior manager of an eminent drug manufacturer why he used so many lobbyists in Washington. After looking at me as if I was a naive, he explained that industry had generated most of its income and the vast majority of its profits in the United States in other countries, such as Great Britain and France, companies have been forced to negotiate the prices they billed from health care systems led by the government or to single payable who have a lot of negotiation lever. But in this country – where health care is Balkanized and the largest public attacker in the United States, Medicare, was legally prevented from negotiating with drug manufacturers – the industry was able to charge much higher prices. It was worth paying an army of lobbyists to try to preserve this privileged position.

Between 1998 and the middle of this year, according to Opensecrets data, a public interest group which follows money in politics, Big Pharma spent more than $ 6.3 billion for lobbying. During this period, the most important reform linked to the prices of medicines occurred in the law on the reduction of inflation of 2022, which allowed Medicare to haggle prices with pharmaceutical companies. In principle, it was a historical development, but the negotiated prices will not be in force before next year and will initially apply to ten prescription drugs over thousands. (In the following years, the number should grow.) If Trump was really determined to resist Big Pharma, he would pressure for a rapid expansion of this initiative, but he does not do that. And, even if he did it, he should corral the Republicans at the Congress to support the new legislation required, which would certainly not be easy: IRA was adopted without a single voting of the GOP.

Instead of real reform, we now have the Pfizer agreement and its launching title of Trumprx. In a press release on the agreement, Pfizer said it would offer many of its primary care medicines at prices on average half of the prices on their list. It seemed promising, but industry analysts quickly pointed out that around eighty percent of Americans obtain their prescribed drugs thanks to insurance plans. For these people, it would probably be even cheaper to get medication in the traditional way and pay for co-payment. Garthwaite said that the purchase of drugs via Trumprx could benefit from “a small subset of people”, mainly among the population that has no insurance coverage. But many drugs would still be prohibitive. Conti calculated that, even with the announced discount of forty hundred of Pfizer for Xeljanz, popular treatment for arthritis and other inflammatory diseases, this could still cost patients more than fifteen thousand dollars per year.