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Another Broken Promise: Trump’s Empty Drug Pricing Bluff Called By Pharma As August 24th Deadline Comes and Goes With No Action

STAT: “It wouldn’t be the first time the Trump administration talked tough on drug pricing but didn’t deliver”

Drug company CEOs privately assured shareholders not to worry…and they were right!

WASHINGTON - Today, Accountable Pharma released the following statement after President Trump’s August 24th deadline for the drug companies to come up with “something that will substantially reduce drug prices” or face his “international pricing index” executive order came and went with no word from the White House on any action.

“Once again President Trump talked a big game about cutting drug prices and followed it up with absolutely nothing but another broken promise to patients and families,” said Eli Zupnick, spokesman for Accountable Pharma. “For a president to issue a threat like this and then allow the drug industry to walk all over him would be laughable if it wasn’t so deadly serious for the patients and families who have seen their drug prices go up year after year while drug company profits went through the roof.”

“When President Trump talks about his plans to cut drug prices sometime in the future he should be asked what he’s done to deliver the ‘50, 60, even 70%’ price reductions he has been guaranteeing for years.” 

Trump’s big promise in July: “…we’re going to hold that [executive order] until August 24th, hoping that the pharmaceutical companies will come up with something that will substantially reduce drug prices. And the clock starts right now. So it’s August 24th at 12:00, after which the order on favored nations will go into effect.”

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Trump doubled down last week: “Drug prices will be coming down 50, 60, even 70%”

But when the deadline hit: “…federal law required signed executive orders to be published in the Federal Register. No ‘favored nation’ order has appeared, so the missing order either violates the law or is incomplete.”

The executive orders had been widely panned as unlikely to have any impact this year even if they were actually implemented. Following his announced executive orders, the pharmaceutical industry cancelled a White House meeting with President Trump while assuring their shareholders that they don’t expect Trump’s executive orders to have any impact during his term.

Trump Claimed He Was Enacting “Favored Nations” Reforms To Lower Drug Prices At Least Three Times In Last Three Years—Promising “Transformative” And “Revolutionary” Change Each Time

  • July 24, 2020: “I’m taking a bold and historic, very dramatic action to reduce the price of prescription drugs for American patients and American seniors. . . . Under this transformative order, Medicare will be required to purchase drugs at the same price as other countries pay. . . . But we have—we get now the lowest price anywhere in the world.  And no more will we have to suffer by saying, “Gee, why is it so much cheaper for the exact same drug in some other country?”
  • July 5, 2019: “We’re going to be announcing something very shortly …  We’re working on a favored nations clause, where we pay whatever lowest nation’s price is. Why should other nations, like Canada—but why should other nations pay much less than us?  They’ve taken advantage of the system for a long time—pharma. So we’re working on, right now, a favored nations clause, so that whatever the lowest nation is, anywhere in the world—or company—but the lowest nation or company.  Then what happens is we will pay that amount, and that’s being worked on right now.  We’re going to do it in the form of an executive order.”
  • October 25, 2018: “Not anymore.  Under our new plan, the Department of Health and Human Services would allow Medicare to determine the price it pays for certain drugs based on the cheaper prices paid by other nations.  Some people call it “favored nations clauses.”  . . . At long last, the drug companies and foreign countries will be held accountable for how they rigged the system against American consumers. This is a revolutionary change.  Nobody has had the courage to do it, or they just didn’t want to do it.”

President Trump Has Been Making Promises On Drug Prices For Years . . .

  • February 4, 2020: “I was pleased to announce last year that, for the first time in 51 years, the cost of prescription drugs actually went down.”
  • July 5, 2019: “We’re going to be announcing something very shortly …  We’re working on a favored nations clause, where we pay whatever lowest nation’s price is. Why should other nations, like Canada — but why should other nations pay much less than us?  They’ve taken advantage of the system for a long time—pharma. So we’re working on, right now, a favored nations clause, so that whatever the lowest nation is, anywhere in the world—or company—but the lowest nation or company.  Then what happens is we will pay that amount, and that’s being worked on right now.  We’re going to do it in the form of an executive order.”
  • April 24, 2019: “Many drug companies are giving European countries a better deal than they give their own country.  And that has to stop.  We’ve already informed them that’s stopping.”
  • February 6, 2019: “It’s unacceptable that Americans pay vastly more than people in other countries for the exact same drugs, often made in the exact same place. This is wrong, this is unfair, and together we will stop it—and we’ll stop it fast.”
  • January 23, 2019: “I just had a meeting on drug pricing and various other things.  And prescription drugs, for the first time in history—the history of our country—have gone down in 2018.”
  • October 25, 2018: “This really is an important day for me.  I’ve been talking about drug price reductions for a long time.  And now we’re doing things that nobody was, let’s say—because I’m speaking on behalf of all of us—bold enough to do.  And they’re going to have a tremendous impact. . . . We’re fighting for lower drug prices, which will now be automatic.  It will be automatic and very substantial.”
  • March 19, 2018: “You’ll be seeing drug prices falling very substantially in the not-too-distant future, and it’s going to be beautiful.”
  • January 30, 2018: “One of my greatest priorities is to reduce the price of prescription drugs… I have directed my administration to make fixing the injustice of high drug prices one of our top priorities for the year. And prices will come down substantially—watch.”
  • February 28, 2017: “[I will] work to bring down the artificially high price of drugs, and bring them down immediately.”

And Latest Executive Order Proclamations Were Met With Skepticism

  • Salon: “Pharma CEOs privately scoff at Trump’s drug pricing orders: “Not expecting any impact.”
  • Washington Post: “Trump signs executive orders aimed at lowering drug prices in largely symbolic move. The orders are unlikely to take effect anytime soon, if they do so at all.”
  • STAT News: “…it’s unclear whether the effort to make progress on drug pricing will pay off, given that Trump can’t immediately enact any of the policies. Rather, the orders direct his administration to begin the normal, notoriously slow regulatory processes needed to reform the existing system. The administration will have to speed through that process to formalize any of the policies before November.”
  • Politico: “‘The drug EOs are a way to give the appearance of movement on Trump’s pricing agenda without actually doing anything,’ wrote Capital Alpha Partners’ Rob Smith in a note, adding that the original favored nations rule has languished with budget officials for more than a year. ‘A more impactful step would be to issue this actual proposed rule and begin the process of finalizing it rather than holding what amounts to a glorified press conference.’”
  • NYT: “Mr. Trump’s executive orders may have more symbolic meaning than any kind of immediate practical consequence.”
  • NPR: “The prescription drug bill that stalled after passing in the House in December, called HR3, would have had a much larger impact, says Stacie Dusetzina, a health policy professor at Vanderbilt University. “The bottom line is that these orders will not make a meaningful difference for patients when it comes to what they pay out-of-pocket for their medications,” Dusetzina writes in an email to NPR.”

MEANWHILE: Drug Prices Have Continued To Soar…

  • Politico: “Drug prices steadily rise amid pandemic, data shows.”
  • Politifact: “Donald Trump wrong again about prescription drug prices.”
  • HealthDay: “U.S. Drug Prices Have Risen Three Times Faster Than Inflation.”
  • CBS News: “2020 is three days old and drug prices are already jumping.”
  • The Hill: “Survey: About 1 in 10 US adults rationing medicine in effort to lower costs.”

… As Drug Companies Rake In Record Profits…

  • West Health Policy Center: “New Analysis Finds Large Drugmakers Could Lose $1 Trillion in Sales and Still Be the Most Profitable Industry.”
  • Axios: “Health care CEO pay outstrips infectious disease research.”
  • Newsweek: “Big Pharma Companies Earn More Profits Than Most Other Industries, Study Suggests.”
  • FiercePharma: “How the 8 biggest U.S. pharmas enriched their shareholders in 2019.”
  • Axios: “Big Pharma is on a stock buyback spree.”
  • Axios: “4 pharma companies saved $7 billion from GOP tax law.”

And Industry Executives Fill The Top Levels Of The Administration

  • NYT: “Trump’s Vaccine Chief Has Vast Ties to Drug Industry, Posing Possible Conflicts.”
  • Reuters: “Trump chooses Gottlieb to run FDA; Pharma breathes sigh of relief.”
  • Politico: “Trump picks ex-pharma executive Azar to lead HHS.”
  • Politico: “Former drug industry lobbyist helps steer Trump drug plan.”
  • Politico: “Trump’s HHS secretary nominee boosted drug prices while at Eli Lilly.”
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