President Donald Trump has given an ultimatum to Big Pharma to reduce its exorbitant prices, posting letters to more than a dozen major drug companies last week demanding that they bring their US prices in line with what they charge abroad, as well as other steps, reports Endpoints News.
He has given them 60 days to comply – otherwise, he says, he will “deploy every tool in our arsenal to protect American families from continued abusive drug pricing practices”.
The letters were addressed to top executives at Pfizer, AbbVie, Boehringer Ingelheim, Novartis, Gilead, EMD Serono, Novo Nordisk, Bristol Myers Squibb, Amgen, Genentech, Johnson & Johnson, GSK, Merck, Regeneron, Sanofi, Eli Lilly and AstraZeneca.
In the letters, Trump tells the companies to give Medicaid, the US health programme for low-income people, access to similar and lower prices to what the companies charge in other developed economies. He has ordered them to match prices for new drugs to foreign introductory prices, and to repatriate any new, higher revenue gained abroad back to the US. And he told them to make the drugs available for direct sale to consumers.
Pfizer told Endpoints News it had been talking to the administration and described those meetings as “productive, while Novo Nordisk said it would “continue to work to find solutions that help people access the medication they need”.
PhRMA, the trade group for large drugmakers, described Trump’s proposal as “price controls” and said it threatened American competitiveness against China, where the biopharma industry is rapidly growing.
Easy to say, hard to do
For years, Trump has taken issue with lower prices paid by European government purchasers and argued that US consumers and taxpayers are getting ripped off.
But actually doing so hasn’t been quite that simple. At least a handful of pharmaceutical firms have held meetings with the government, which has been trying to turn the broad strokes of Trump’s ideas into policy. One obstacle has been obtaining the actual prices that companies get in Europe – amounts that are often trade secrets.
Without knowing prices abroad, the administration can’t set new price targets for the US.
A source described the companies as having been “difficult”, in the administration’s eyes, saying that the lack of progress has frustrated Trump, who sees the drugmakers as sitting on their hands.
The letters appear aimed at bullying the companies into co-operation. In the letters, Trump said his administration was “ready to implement these terms. I expect you to further engage with them immediately, in good faith”.
Trump’s tariff and manufacturing policies have further complicated any agreement. While he is attempting to get pharma companies to drop their prices, he’s also trying to get them to make billions of dollars in manufacturing investments, and threatening substantial tariffs on pharmaceutical products made outside the US.
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