Trump Slams "Astronomical" Drug Prices, Tells CEOs To "Get Prices Down"

Tyler Durden's picture

In his latest close encounter with top US CEOs, President Donald Trump told drugmakers at a White House meeting Tuesday they were charging “astronomical” prices and promised to get better bargains for government health programs, something even Bernie Sanders would agree with. He also said he would focus on finding ways to get new medicines to market faster.

The pricing has been astronomical,” Trump said to CEOs of some of the world’s biggest drugmakers, who came to Washington after Trump’s criticism of the industry earlier this month sent drug and biotechnology stocks plunging. “You folks have done a very great job over the years but we have to get the prices down.”

At the meeting was Pharmaceutical Research and Manufacturers of America CEO Stephen Ubl, Merck & Co. CEO Ken Frazier, Eli Lilly & Co. CEO Dave Ricks, Celgene Corp. CEO Bob Hugin and others. They embraced Trump’s calls for lower taxes and fewer regulations. The gathering with drug CEOs came after Trump’s said on Jan. 12 that the industry was “getting away with murder” and promised to act on drug prices. Since then, drugmakers have turned up their lobbying efforts with Congress as a potentially friendlier force that might counter Trump.

“Some of the policies you’ve come out and suggested i think can help us do more -- tax, regulations,” said Lilly’s Ricks. Also at Tuesday’s White House meeting were Novartis AG CEO Joe Jimenez and Johnson & Johnson Worldwide Chairman of Pharmaceuticals Joaquin Duato.

A full clip of his meeting below:

Trump has threatened to have the government negotiate prices directly with the industry on behalf of Medicare and Medicaid, which are some of the world’s biggest purchasers of health-care products and services and cover tens of millions of Americans. “Competition is key to lowering drug prices,” the president said.

At the same time, Trump promised to slash regulations, get new treatments to market faster at the Food and Drug Administration, and increase international competition. “We’re going to streamline FDA; we have a fantastic person” that will be announced to lead the agency soon, Trump said. He also promised to cut taxes on business and lure companies back to the U.S.

As Bloomberg notes, the drug industry is one of Washington’s most powerful, and each year spends hundreds of millions of dollars on lobbying, in addition to being one of the biggest donors to political campaigns, according to the Center for Responsive Politics. PhRMA, also launched an image makeover Jan. 23 that will feature advertising and public affairs events that focus on the value of its products.

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thunderchief's picture

Can this guy just stop kicking ass for one day, so we can all catch up?

Go Trump!

layman_please's picture

only thing he needs to micromanage in this regard is to get free market working. otherwise it's just more big government. slight but important difference.

FullHedge's picture

Dudes done more in his few days in office than Obama did in 8 years.

jimsoong25's picture

I read that Trump slept around 3 hours per night the last 6-8 weeks of the campaign.  He rarely takes days off, like this past weekend.  I've met high energy guys like this before.  They need two sets of staff, one for the AM and one for the evening.  He's a high energy guy who is way ahead of the media.  The media types are lazy and few work weekends.

chiquita's picture

Going way back--to the 1980s--Trump claimed he only slept 3 hours per night.  Nothing new for him.  Can't imagine--I'd be a zombie on only 3 hours sleep.

SILVERGEDDON's picture

Quality food, nutritional supplements, clean water, diet, and exercise would put 90 percent of the drugs in society into the dustbin of history as the 20th century witch doctoring they truly are. 

How many commercials that promise to get rid of itchy skin (maybe )- if you are willing to put up with the side effects ? Which consist of cancer, heart failure, rectal bleeding, constipation, vertigo, blurry vision, hives, more rash, loss of hearing, and so on ?

Fuck the drug companies with a barbed wire baseball bat dipped in flaming napalm.

Toss in Monsanto, and some of the other nasty motherfuckers setting people up for the doctor and drug parasites to kill off expensively and slowly.  

CTG_Sweden's picture

layman_please:    

"only thing he needs to micromanage in this regard is to get free market working. otherwise it's just more big government. slight but important difference."

 

My comments:

Sometimes the free market doesn´t work. If the free market has generated a winner that has created a monopoly, it may be hard to establish competition or take too long time. There are other investments than generic drug production which currently are more attractive, and has been for a long time. But if Trump would offer tax breaks for manufacturing generic drugs it would might be more attractive to make investments in the generic drug industry and that would might in turn generate the competition that would bring down prices.

 

Another way to reduce prices for generic drugs could be legislation that automatically would trigger public tendering for a generic drug once the profit margin exceeds a certain level. This legislation could also stipulate that the drugs procured through the public tendering must be sold at no, or a very small, profit for, let´s say, 10 or 20 years. That would probably create a sufficient deterrent factor.

 

The US has in the past when there was no no big government and not even an income tax intervened when the free market had produced a winner that had established a monopoly or near monopoly. The man behind the Sherman Antitrust Act was the Republican senator John Sherman. The lawsuit against Standard Oil brought under the Sherman Antitrust Act was initiated under the Republican President Theodore Roosevelt. The US Supreme Court decided in favour of the government in 1911 when the Republican William Howard Taft was the President.

 

 

 

MFL5591's picture

Again the man is spot on!

wildbad's picture

trump was right again..i'm getting dizzy with all of the winning. i can't keep up with this grandpa.

what is he taking brain force or super male vitality?

pods's picture

Yep, you will get whacked for posting Karl here, but he is spot on with this.

pods

Heroic Couplet's picture

In addition to posting a fee schedule, post "don't bother' it's a waste of money point of no return." Privately, a dermatologist I know scoffed at a patient with Stage IV metasized melanoma seeking radiation therapy. "Hair will fall out." Publically, of course, the dermatologist had to write the order.

 

Buck Johnson's picture

I have to admit, this guy isn't afraid to say and do what he must.  He takes on anybody and anything.  If  he can get these guys to heel, he has it made.  As the article said, Pharma is a multi  hundred million dollar lobby machine in Washington and there is a reason for that.  To keep prices high.

 

truthseeker69's picture

So trump-stumps seem to be in favor or strong authoritarian central government who dictates prices? No room for capitalism in healthcare/medicine? Who would have thought! 

(Yawn) 

Let me know when there's actual change in this country.

 

/shmucks 

Cognitive Dissonance's picture

Viagra is up to $10 per party pill. Not that I wold know anything about that. :-)

<Personally I'm so open to suggestion and the placebo effect blue M&M's do the job for me.>

hotrod's picture

$10 for a hard on.  Damn.  Trump's got Melania so probably does not have that problem

MANvsMACHINE's picture

Maybe that's why he's turned in the old for new every few years.  It may be cheaper than paying $10 per roll.

chiquita's picture

Are you telling me the 73 cents per pill quotes I get almost everyday in my spam folder from the Canadian Rx is FAKE?????  I'm SOOO disillusioned!

duo's picture

But what about R and D, where we take a 50 year old drug, put it in a new inhaler, then raise the price 100x?

techpriest's picture

It can only work with the FDA as gatekeeper. Otherwise, you could 3D print your own inhalers, buy a pallet load of the drug, and sell it for 1% of the current price and still make money.

azusgm's picture

The FDA is a big swamp that needs to be drained right down to dust. Don't leave any mud at all.

Dendreon probably never would have gotten Provenge to market if the activist shareholders had not kept watch on the FDA, especially the advisory panel.

DNDN's problems were pricing and the horrendous CEO.

drendebe10's picture

The fda is a big giant inefficient bureaucratic nightmare filled with people whose idea if a job is show up, push some bullsht papers around & get paid better than private sectior workers.  Exactly like every single bureaucracy in every gubmnt.  Fukemall.

GoingBig's picture

Ever hear of thalidomide? Yeah, I didn't think so.

azusgm's picture

I'm a nurse with 20+ years in obstetrics. Of course I've heard of thalidomide.

Have you heard of the polio vaccine? I'm good with that.

Have you heard of vaccine court? Have you noticed the proliferation of vaccines that the kids are supposed to have to be able to enroll in school? Do you think the vaccine makers have the financial incentive to push for mandates for unnecessary or even harmful vaccines? Adverse effects are not their problems.

Did you stay up and watch the vote on Medicare Part D like I did?

Guess not.

Nunya Bidness Gogl's picture

"intellectual property"

Que bono?

chiquita's picture

But what about R and D, where we take a 50 year old drug, 

 

They don't always do this...  If there's some hotsy totsy new drug they want to push and there's some tried and true old drug that might be standing in the way that doctors like and trust, what do you think happens to the old tried and true?  It oftens gets "decommissioned" so to speak.  Case in point is Rynatan, which was a long standing go to decongestant/antihistamine combo that worked really well for allergy sufferers.  It provided non-drowsy relief.  It also had a children's version.  When the new generation of allergy medications, such as Zyrtec, Allegra, and Claritan came along, these weren't exactly the same, but the drug companies wanted them to be promoted.  Despite still being a very good and effective drug, Rynatan was taken off the US market--it is still available in Canada.  Very unfair to allergy suffers (like me) who can't take the newer drugs due to their side effects.  

SallySnyd's picture

Here is a look at how much drug companies pay physicians to flog their products:

 

http://viableopposition.blogspot.ca/2017/01/buying-influence-americas-he...

 

It's no health care in America is so expensive.

grunk's picture

Trump blitzkrieg.

 

RedDwarf's picture

Just do away with any mport restrictions on drugs.  Prices will immediately go through the floor for drugs.

bh2's picture

Actually, the even easier way is to simply compel drug companies to price drugs in the US based on the average world price they charge for same or similar drugs.

That neatly gets around all arguments about drug quality, etc., and directly addresses the real problem. Administrative costs (audits for compliance) are low and standards for complaince are objectively simple to define.

Americans are being screwed. If you ever live offshore, you will quickly realize drugs sold there are typically a fraction of the cost in the US.

RedDwarf's picture

No, that is not easier.  That is new laws, not getting rid of old ones.  You'll have to draft the law, get Congress to pass it, etc.  WAY more overhead and work and time.  Also you would have to set up a beurocracy to calculate those prices, and said agency will be regulatorily captured by the people they are regulating.

floomby's picture

Actually price controls are a terrible idea. Government coercion generally leads to bad results. A bit of competition is the way to go.

What are the drug companies lobbing for - monopoly status for their products. Do the opposite of that i.e. open up the market and we should get better results in price (and new innovation as well since being more innovation is a way to get an advantage in the market).

MEFOBILLS's picture

Actually price controls are a terrible idea. Government coercion generally leads to bad results. A bit of competition is the way to go.

 

The comment above makes the assumption that all markets are elastic competitive.  

There are three kinds of markets:  Elastic, Inelastic and Mixed.  

When thinking about prices and markets, you must use the market type as a filter.

In the case of Drug companies, they put their drug out there as a price, and others can compete.  (If there another equivalent drug.)  Therefore, this market type is elastic competetive.  

What can happen in any market type is that rentiers will game the system so they can take higher prices, and then higher profits.  

Government regulation is CORRECT, when it lowers prices.  If an actor is engaged in anti-competitive monopoly behavior, then regulation is appropriate.

It is important to get away from these knee jerk reactions that free competition is a panacea.  The desireable thing is LOW PRICES.  An economy that delivers lowest price and high quality is the one that is desireable.

Inelastic markets are natural monopolies, and hence must be government owned or regulated.  The medical field is a mixed market, with both inelastic and elastic modes.  

You don't give a damn about price when you are unconscious or near death, do you?  Regulation must kick in during this phase, or you will be taken advantage of by rentiers.

exi1ed0ne's picture

The problem with that is the rentiers own the regulatory boards and have direct ties to the law and regulatory machines that govern their behavior.

Quis custodiet ipsos custodes?

Expecting a third party to have your best interests at heart is the fairy tail sold by people who wish to manage our available choices for their benefit.  Its nothing more than another turtle to hold up the previous one, all the way down.

MEFOBILLS's picture

Actual history is the test isn't it?

Government is the third party you elect to serve your interests.

To expect an unlected party, whose motive is personal gain, to then look out for your interest is twisted logic.  It doesn't pass even the basic smell test.  The markets are GOD!  Prices are perfectly elastic!  

Who will guard the guards is the age old question.

In ancient Venice, the Doge was elected by straw votes.  The voting system was to prevent special interests from gaming the system.  The long march of human history is to overcome abuses, from Oligarchy, from Monarchs gone wrong, from Imperialism, Bolsheveism.  The fact of the matter is that humans are rent-seekers by nature... they want unearned income.  There has to be restraining law.   Law done in advance can be moral.  

Operations done behind closed doors will not be to your benefit.  No fairy tale... reality.

Hungary had a constitutional monarcy that was fairly balanced, and lasted for over 1000 years.  These sort of examples counter your pessimistic narrative. 

exi1ed0ne's picture

There are exactly two ways for a fair and balanced government:

1) Small enough population size that elected officials actually have personal accountability

2) The ruling class's interests coincide with the majority of the population.  There are examples in history, yes.  However they are anomalies when you look at the whole of it.

The "ism" isn't an issue, and I agree with your three types of markets - Econ 101.  I disagree with your method of control of abuse in inelastic markets.  Government is nothing more than outsourcing our responsibilities - to ourselves, our community, etc.  Market makers need to have skin in the game and be held accountable by the marketplace.  That can't happen when you abdicate that responsibility to another entity, who does not have to suffer negative outcomes.

Take the funeral business - also inelastic.  How many exposes have their been catching them overselling a box to stuff grandma in to grief stricken people?  Who is at fault?  I'd proclaim its with the people being set up for a fleecing.  We have a deficit of personal responsibility in this country, primarily because the assumption is Uncle Sam's got our backs.  That kills off some critical survival skills designed to protect us from predators.

Just because the market is inelastic, doesn't mean buyers can't hold sellers accountable.

11b40's picture

But, but , but, how woud the drug companies be able to pay for all those TV ads?!?!

Last night, the wife & I were watching a program on TV when a commercial came on for some drug & we changed channels.  There was a drug commercial on there, too, and we changed channels again, just to find...another drug commercial.  It seems like big media would be in trouble without these drug companies buying ad time.  

 

chiquita's picture

Based on these pharma ads, you have to wonder why anyone would ever want to take these drugs.  Most of them list such awful side effects, it's often hard to tell whether they're warning the well to stay well so they don't have to end up on the drug or they're offering some "hope" to the inflicted.  When the diseases are avoidable, then there's no way you'd want to risk many of the things these drugs could cause--and this is just the stuff they are advertising.  Without digging deeper into the contraindications, I'd bet there's some even worse stuff buried in the technical literature.  There has never been a good reason for pitching prescription medications directly to patients--doctors have never liked having patients come in and request specific medications and the ads are just plain annoying.  I for one would be just as happy to see an end to drug ads or, at the very least, a limit on how many and when they can run (like only during infomercial time in the wee hours of the morning).  OR to qualify to run as many hours of advertising, maybe the drug companies should have to run an equal amount of time educating the public about the health issues their drugs address, such as preventing diabetes, obesity, COPD, IBS, erectile dysfunction, depression, and fill in the blank.

Elco the Constitutionalist's picture
Elco the Constitutionalist (not verified) bh2 Jan 31, 2017 12:23 PM

Your comment has way too many weasel words. Are you a lawyer for Big Pharma?

drendebe10's picture

Buy ur prescription medsfrom canada.

Jason T's picture

Also, Americans need to stop popping so many pills already.  : /

jus_lite_reading's picture

Indeed. That alone might reduce health insurance costs by 50%.

skeelos's picture

Actually what happened was in 2014 the Feds cracked down on legal prescriptions for painkillers. They came down on doctors and pharmacies who in their opinion over dispensed painkiller prescriptions. As a result, big Pharma had less big profits.

To make up for the loss, big Pharm jacked up the price on other non-painkiller prescriptions in the neighborhood of 20x. A prescription that had been $20 suddenly shot up to $400, another victim in the "War on Drugs".

Something Trump should do as soon as possible is end the useless and senseless "War on Drugs". It would be good for the country in a lot of different ways.

small axe's picture

These drug vulture companies deserve a special place in hell

ptoemmes's picture

Or...if drug comaanies can make their drugs abroad then USA citizens can buy drugs abroard - cheaper.

BigFatUglyBubble's picture

If people weren't so obese we wouldn't need to buy so many drugs.  Obesity in America is a mega-epidemic, especially in the south.  Address the root of the issue. 

techpriest's picture

This, in turn, stems from

1) ag subsidies that over-promote cheap grains in the diet, and

2) Junk science pushing the idea that soy oil, hydrogenated palm oil (Crisco), etc. are "healthy" relative to coconut oil, grassfed lard/tallow, etc. This is the same junk science that encouraged cheap carbs (Snackwells) over fat.

To get the truth, read "The Primal Prescription" or "The Paleo Solution," watch the documentary "Fat Head," and do the opposite of the Academy of Nutrition and Dietetics (AND). It just so happens that I have learned about the likely future AND president, Neva Cochran, and trust me, she is 100% a Monsanto mouthpiece. In return she lives in a very nice house in a gated community, $800k-$1.5M houses in the neighborhood according to Zillow.