The other thing is that drug companies spend more on advertising and marketing than they do on R&D. "In some cases, medications that cost a few dollars in a foreign country cost hundreds of dollars in America", Trump said. "It's time to end the global freeloading once and for all". "The middlemen became very, very rich ... they won't be so rich anymore".
[Editor's note: Corie Lok co-authored this report.] In a much anticipated speech at the White House this afternoon, President Trump unveiled a long-awaited plan meant to cut the cost of prescription drugs in the U.S. The administration would, for one example, stop limiting pharmacists' ability to tell Medicare Part D patients when they could pay less by not using insurance.
Other parts of the plan were previously released in the president's budget proposal and would require action by Congress.
Any of the proposals could help, or hurt, health insurers. That's more than twice the $497 per person spent in the United Kingdom, which has a nationalized health care system.
As Public Citizen noted in a series of tweets responding to Trump's speech, the notion that low drug prices overseas produce high prices in the U.S.is a Big Pharma talking point that is "completely untrue". According to statistics of the Organization for Economic Co-operation and Development, the United States has the highest annual health expenditures of any industrialized country, at almost $10,000 per capita, with drugs prices playing a major role.
He says the plan will lead to tougher negotiations, more competition and much lower prices at the pharmacy counter and will begin to take effect soon.
Once it was clear direct negotiation wasn't on the agenda, investors snapped up shares of the biggest US drug makers, including Abbvie (ABBV - Free Report), Amgen (AMGN - Free Report) and Merck (MRK - Free Report), each of which finished the day 2% or more above their mid-speech lows. Back in September of 2015, specialists involved in infectious disease protested the enormous overnight increase in the price of the over 60-year-old drug that is commonly used for treating a life-threatening parasitic infection.
The reason? The plan doesn't seem to be "taking them on" at all. Larry Levitt of the Kaiser Family Foundation asked on Twitter.
Direct the Food and Drug Administration to evaluate requiring drugmakers to state their list prices in direct-to-consumer advertisements. "A lot of good questions in the plan but very little actual action, especially against PBMs", tweeted Walid Gellad, a drug policy expert at the University of Pittsburgh.
In the U.S., Medicare is the largest purchaser of prescription drugs, covering 60 million seniors and Americans with disabilities, but it is barred by law from directly negotiating lower prices with drugmakers.
Mr. Trump's plan mostly targets drug makers and distributors, seeking to increase competition and create incentives for lower prices.