Monday, October 25, 2021

Trump announces plan to lower drug prices

Washington, Oct 25 (EFE).- President Donald Trump presented on Thursday an ambitious plan to lower the price of some prescription drugs, in an attempt to address the imbalance between the costs of medication in the United States compared to Europe.

Trump announced that the agency charged with operating Medicare – the national health insurance program for senior citizens – will be allowed to negotiate the cost of certain drugs directly with pharmaceutical companies, based on the prices paid in other industrialized nations.

“This is a revolutionary change,” Trump said during a speech at the Department of Health and Human Services in Washington, DC.

“The drug companies and foreign countries will be held accountable for how they rigged the system against American consumers,” who “are charged much more – and in some cases much, much more – for the exact same drug,” the president said.

“Americans pay more so that other countries can pay less. Very simple. That’s exactly what it is. It’s wrong. It’s unfair,” Trump added.

As opposed to other developed countries, the US does not regulate the cost of most drugs, which allows pharmaceutical companies to drastically raise prices.

In May, Trump said he was planning to pressure pharmaceutical companies to lower prices in the United States with measures that could lead to price increases abroad.

“When a pharma company is negotiating with Germany, the discount they give to Germany will also have to be passed along to the United States. Foreign prices go up, US prices go down,” Craig Garthwaite, an economist at Northwestern University, told Vox.

The pilot program announced Thursday by Trump is a first step in this strategy, as it will create a price index that Medicare will use when negotiating with pharmaceutical companies, with the goal of saving more than $17 billion dollars in five years.

The price index would only apply to drugs administered in hospitals and clinics, including those used to treat cancer, without affecting prescription medications sold in drugstores.

The measures, however, will likely be opposed by large pharmaceutical companies that could attempt to derail the pilot program, which is not expected to be put in place until 2020.