On the surface, Trump ordering prescription drug prices to be reduced seems to be a good political move. It’ll be popular. People hate Big Pharma like few other things. The shameless greed and endless price rises make it an easy target. Americans pay far more for meds than anywhere in the Western world.
So Trump is now “ordering” price reductions. As usual with Trump, it’s at the functional level where everything falls to pieces.
The questions are:
Can he just issue an order to bring prices down?
Can he force them to lower prices, and if so, how?
Do they have to comply?
If prices can be reduced this way, why wasn’t it done 30 years ago?
There’s a rather predictable problem with this idea.
Big Pharma would lose money. Lots of money. The only reason for the existence of this colossal parasitic sector, in fact. Many meds are “maintenance” drugs, not cures. Many drugs are also cursed with highly debatable effectiveness.
Obviously, Big Pharma doesn’t exist to help anyone but itself. Few if any of these companies pay corporate income tax in the US. These aren’t charities. The reaction to the idea of reduced prescription prices so far has been falls in manufacturer stock prices.
There’s a further problem, and it’s a sort of half-baked half-witted and can’t work way of keeping Big Pharma onside.
The idea is that other countries should pay more for drugs to maintain profits. That’s not going to happen. It’s a sort of first-year accounting book balancing exercise at the world’s expense.
For a very turgid but highly relevant example of related issues:
In Australia, we have the Pharmaceutical Benefits Scheme, which subsidizes costs for consumers. American drug companies routinely seem to resent the idea that Australians can afford to buy their products.
The main implication of this order is that it will increase prices in Australia.
The other problem is that it won’t happen. The PBS is untouchable. Neither side of Australian politics will consider any such thing. Nor will countries like Canada, the UK or the EU. It’s out of the question.
By comparison, US pharmaceutical costs are utterly irrational. The numbers are pretty gruesome. See this PDF link for a grim description.
Just one example – An antidepressant called Fluoxetine costs $31 in Australia and $2,244.10 in the US.
Anyone with an attempt at a brain would see that such a huge price disparity is never going to work. Strangely, US life expectancy is also about 10% lower than Australia. Maybe it’s just the stress?
It’s been suggested that Trump might penalize Australia for the PBS with tariffs for the terrible crime of simply being able to pay for prescriptions.
Short response, “be damned”.
If push comes to shove, we can replace all those worthless placeholder drugs with generics anyway. Maybe even with drugs that work. Let’s also not overlook the high levels of deaths from prescription pharmaceuticals. Think anyone’s going to pay more for that?
Nobody’s interested in dying for the sake of him getting some populist publicity, let alone soothing the wounded feelings of Big Pharma.
As usual, anything that would make life bearable for American consumers won’t work. It certainly won’t work based on expecting the world to foot the bill for America’s insane Big Pharma prices.
Just one more thing.
The world does not take orders from Donald Trump.
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Disclaimer
The opinions expressed in this Op-Ed are those of the author. They do not purport to reflect the opinions or views of the Digital Journal or its members.
