President-elect Donald Trump during a press conference on Wednesday said drugmakers "are getting away with murder" in setting high prices for their products.
Trump slams Rx drug industry
Trump said the prescription drug industry "has been disastrous" and criticized certain industry practices, such as moving drugmakers' productions overseas. He said drugmakers are "leaving" the United States "left and right," adding that pharmaceutical companies "supply our drugs but they don't make them here, to a large extent."
Trump also suggested that the federal government should start negotiating drug prices. Federal law bars the government from negotiating prices for drugs covered by Medicare, which spent $325 billion on prescription drugs in 2015.
"We're the largest buyer of drugs in the world and yet we don't bid properly, and we're going to start bidding and we're going to save billions of dollars over a period of time," he said.
Pharmaceutical industry takes a hit following Trump's comments
The share prices of several pharmaceutical companies' stocks declined following Trump's comments.
Overall, the iShares NASDAQ Biotechnology Index was down by about 3.5 percent at closing Wednesday. According to the Boston Business Journal, biotech stocks had been rising for more than a week before Trump's comments.
At the J.P. Morgan Healthcare Conference, Mylan CEO Heather Bresch on Wednesday said it was too early to respond to Trump's comments because his exact plans remain unclear. However, she said increasing public outcry over high prescription drug prices suggests there is need for reform. "The pricing model has got to change," she said, adding, "It's not incremental change; I don't think that's what this country needs. I think it's truly rethinking the business model."
Allergan CEO Brent Saunders, who at the conference said the company is working to limit its price increases, refuted Trump's comment that the pharmaceutical "industry is getting away with murder." Saunders said, "It's a complete contradiction to say the industry is getting away with murder when the industry is committed to saving and improving lives."
Separately, Brad Loncar, manager of the Loncar Cancer Immunotherapy ETF, said, "When the president-elect says we're going to negotiate drug pricing, you have to take that seriously, but at the same this is a complicated issue because there's not going to be clarity on drug pricing reform anytime soon."
Lawmakers appear open to reforms
Some lawmakers appear open to proposals to reform the prescription drug industry, STAT News reports.
Rep. Tom Cole (R-Okla.) said, "A lot will depend on the specifics of what [Trump is] saying, but right now, he's got the whip hand. I think most Republicans are inclined to support the new president."
Sen. John Barrasso (R-Wyo.) and Rep. Greg Walden (R-Ore.) said they are waiting to see what proposals Trump has to reform the pharmaceutical industry.
Sen. Bernie Sanders (I-Vt.) questioned whether Trump's comments will spur Republicans and Democrats "to stand up to the pharmaceutical industry and their lobbyists and their campaign donations and fight for the American consumer and end the disgrace of having our country pay by far the highest of the price in the world for prescription drugs."
However, Sen. Orrin Hatch (R-Utah) called proposals to allow the government to negotiate prices "dangerous" because it could stifle drugmakers' ability to innovate. If that happens, Hatch said, "we could lose all kinds of therapies that are very important."
(Muchmore, AP/Modern Healthcare, 1/11; Frieden, "Washington-Watch," MedPage Today, 1/11; Bean, Becker's Hospital Review, 1/11; Stendahl, Boston Business Journal, 1/11; Gough, Pittsburgh Business Times, 1/11; Preston, MedCity News, 1/11; Johnson, "Wonkblog," Washington Post, 1/11; Humer/Campos, Reuters, 1/11; Scott, STAT News, 1/12; Haberkorn/Karlin-Smith, Politico Pro, 1/11 [subscription required]).
What providers can learn from the drug pricing debate
We already knew that patients are becoming more sensitive to health care costs. But public uproar over one drug's 5,000 percent "overnight" price hike proves that patients are more discerning—and vocal—than ever. With more of their money on the line, patients are actively deciding when and where to access care based on cost.
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