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Trump Hints at Plan to Reduce Drug Prices
In another of his famously obscure tweets, President Trump has announced that “I am working on a new system where there will be competition in the Drug Industry. Pricing for the American people will come way down!” For now, it’s unclear exactly what he is referring to, according to an article posted on the BioSpace website, but one of the things that the president announced only days after the election was plans to “reform the FDA.”
On March 1, during his first address to a joint session of Congress, Trump stated that the U.S. drug approval process was “slow and burdensome.” According to Trump’s 100 Day Plan, there are “over 4,000 drugs awaiting approval, and we especially want to speed the approval of life-saving medications.”
Trump has also called for the loosening of restrictions on drugs that have been approved by foreign regulatory agencies. However, he has yet to appoint a new head of the FDA.
BioSpace quotes market analyst Ulmer Raffat, who wrote of Trump’s tweet: “Question really is: what does that mean? Recall that President Trump has previously made references to ‘bidding.’ There are 2 types of competition: 1. Brand vs generic—this already exists (and in fact, market forces drive generics to have very fierce pricing wars); 2. Brand vs brand—for this to happen, you need interchangeable branded products … e.g., just because 2 drugs are approved for same indication doesn’t make them direct ‘competition.’”
Raffat identified five things needed for true competition among brands: multiple drugs in the same class, the same indication, the same route of administration, similar efficacy, and similar safety. Some drugs have these, but not all.
Raffat went on to write that “most importantly, many therapeutic areas with generally interchangeable branded products are already under Part D … and have formulary tiers etc. And that’s the ultimate question: is the President referring more to Part B (where no formularies exist currently)? Reality is, we don’t know until something definitive is put out.”
Source: BioSpace; March 7, 2017.