prescription prices
Employee Benefits

Drug Wars

Ed Oleksiak
Ed Oleksiak
Sr. Vice President, Employee Benefits

You may have heard it on a presidential campaign ad, at a rally, or in the media…President Trump campaigned, “I will bring down drug prices!” My question now is, “How is he doing?” Well, I think he’s serious. And two things make me believe that.

First, he appointed Alex Azar to head Health and Human Services (HHS). Azar was President of Lilly USA — a division of Eli Lilly and Company (a global pharmaceutical company). Does this indicate the administration will favor pharmaceutical manufacturers, or did the president appoint someone who understands the inner workings of one of the least-transparent parts of our healthcare system? One clue into the reason for the Azar appointment may be a paper published in February.

The white paper was from the Executive Office of the President of the United States. The paper was prepared by The Council of Economic Advisers. The title is “Reforming Biopharmaceutical Pricing at Home and Abroad.” The paper sights two goals:

  1. Domestic drug prices paid by Americans should be reduced.
  2. The price of better health in the future should also be reduced by spurring medical innovation.

The report points out areas of focus, which could advance both of these causes.

  • It looks at government programs that currently lead to higher drug prices. Program policies within Medicare, Medicaid, and 340B are sited as resulting in higher drug prices and are targeted for reform.
  • It examines how foreign companies pay less than their fair share for drug innovations. This is evidenced in the fact the U.S. consumes 46 percent of the patented pharmaceutical sales, while the U.S.-based share of pharmaceutical profits were 78 percent.
  • Finally, they suggest FDA programs and other government programs could be streamlined to speed up and lower the cost of market entry for new drug innovations.

Based on the two events described above, I would say President Trump may be positioning the administration to start some drug wars!

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