Drug Pricing Executive Order: Likely Win for Pharma

Fran Quigley

Despite President Trump’s repeated promises to take on the pharmaceutical industry and drug pricing, his recently released Executive Order shows he will do no such thing. In fact, Trump hired industry executives to lead the process of drafting his policy response that now includes an industry wish list of eased regulation and extended monopolies. This is the industry he had previously described as “getting away with murder.”

The New York Times and access to medicines advocates obtained a draft of a planned Executive Order on drug pricing. In my article on it in Truthout I argue drug prices will increase for the poor of the United States and elsewhere in the world.

Trump points the finger of blame for high medicines prices not at an industry that reaps record profits but at the poor. Specifically, the order aims to dial back the 340B Drug Pricing Program. This scheme required drug companies that benefit from the lucrative US Medicaid market to give discounts to hospitals and clinics that serve low-income patients.

The Executive Order also pushes for ramped-up trade pressure on low- and middle-income countries that dare to reduce the length of drug monopolies that make medicines unaffordable for their citizens. In his post for HealthGap, Professor Brook Baker explains how the proposed Executive Order is the latest example of the United States using its trade power to force low- and middle-income nations to adopt the pharmaceutical and medical device industry’s monopoly-maximizing agenda. (Because, to be fair, this was the agenda for the Obama and previous administrations as well.) Pushing for longer and more extensive monopolies for essential medicines is a policy approach that is shrouded in the terms “intellectual property” and “protection of innovation.” Unmasked, though, it is a power play that elevates corporate profits over the lives of sick people, and utterly disregards their right to health. Baker writes, “Unless restrained, Big Pharma gouges—to the extent that the market will bear, and that’s quite an extent when health and lives are at stake.”

Missing from the draft Executive Order is any reference to the many proposed fixes that would actually reduce drug prices in the United States, even though some of those fixes were embraced by a campaigning Trump. There is no mention of allowing the Medicare program to adopt a formulary and negotiate lower drug prices; no reference to allowing legal imports of medicines from other nations; and not a word about exerting the US government’s extensive legal rights to allow generic drug production and break the monopolies of over-priced patented drugs, especially the many critical drugs that were developed with government funding.

Some of Trump’s political opponents tried to take his previous tough talk on medicines prices at face value, including members of the US Congress who engaged in discussions with him about how to tackle the problem. Their response to the draft Executive Order likely mirrors that of most Americans who are struggling to afford their medications. “Your statements and your promises gave many of us hope, but your planned executive actions suggest that you have abandoned these promises in favor of the very pharmaceutical lobby you warned of,” wrote US Representatives Elijah Cummings and Peter Welch in a June 21st letter to Trump.

“Simply put, Mr. President, these measures utterly fail to make good on your promise to the American people to take aggressive action to cut the skyrocketing price of prescription drugs. Six months into your presidency, the pricing power of the pharmaceutical industry continues—unabated and unchecked.”

Unabated and unchecked, indeed. And, if this Executive Order goes forward and has its desired effect, both those prices and industry power will be increased.

Fran Quigley is a clinical professor and director of the Health and Human Rights Clinic at Indiana University McKinney School of Law.