Trump Declares War on Big Pharma by Gutting Prescription Prices for Seniors

Trump is a bulwark against big pharmaceutical companies. Pfizer and Moderna recently made a big announcement right after the presidential election to let the American people know that they were on the brink of having an effective vaccine.

The companies have made great strides in developing a COVID-19 vaccine. After several human trials, they now have a vaccine with a proven success rate of 95%.

Trump has since cried foul to the news. Big Pharma ran expensive ads to counteract and derail Trump during the campaign. Then they had the audacity to state they had a cure once the tally from all the votes in the swing states had been completed.

Pfizer Vaccine

Pfizer will request emergency authorization from the FDA to distribute the vaccine which must be kept at a temperature of -70F. Patients must take the vaccine in two doses within four weeks. However, it will take several months to administer the vaccine.

Only 20 to 50 million doses will become available in the next few weeks. The USA will only get half of these doses. Foreign countries will get the rest of the vaccines. Health care professionals and at-risk individuals will have access to the first vials of the vaccine for free.

Out-of-control Drug Prices

For the last four years, Trump has been on the brink of delivering lower drug prices to the inquiring public, especially senior citizens. The big pharmaceutical companies have been robbing America blind with expensive drug prices. It uses American capitalism to pay for the development and the manufacturing of life-saving pharmaceuticals.

The European and Asian governments negotiate fair drug prices directly with pharmaceutical companies. Therefore, their citizens pay lower drug prices. Big Pharma cannot do this in the United States. Drug prices must be set according to market conditions and not directly with the American government.

Cut the Middleman

President Trump wants to do two things. First, the president wants to pin the drug prices that Medicare Part B pays for seniors to be in direct correlation to the same drug prices overseas through the so-called "most-favored nations rule." The plan would be phased in over four years. It would shift a drug's average sales price to the preferred pricing model as determined by a formula.

Once the proposed changes occur in 2021, patients can expect to save $28 billion per year. The new model would be available for seven years and would favor the 50 most popular Medicare Part B drugs prescribed through doctors. The premium drugs account for 73% of Medicare spending.

Seema Verma at the Centers for Medicare and Medicaid is developing a Part D version. Per Trump, "The drug companies do not like me too much, but we had to it. I just hope they keep it."

Rebates

Second, Trump wants to eliminate the rebates paid to pharmaceutical middlemen like pharmacy benefit managers and insurers. Instead, Big Pharma must pass the savings straight to the consumer.

Pharmacy benefit managers said that eliminating the rebates would diminish their ability to negotiate fair drug prices and control costs. The rebate rule could cost the American government $196 billion over ten years.

The CEO of PhRMA

Steven Ubl, the CEO of PhRMA, has ramped up his lobbying efforts to fight the proposed changes. "It defies logic that the administration is blindly proceeding with a most favored nation policy." Ubl goes on to rant that this "gives foreign governments the upper hand in deciding the value of medicines in the United States."

When governments try to set drug prices, it discourages companies from investing in new medicines and treatments. These harmful policies hinder employment and economic growth.

Jay Timmons

Even Jay Timmons, who is the president of the National Association of Manufacturers, said that such policies mirror "socialist policies," and the new rules would not lower premium drugs' prices. The Federal Government may have to pay an additional $177 billion over the next ten years to accommodate the changes.

Trump decries socialism. On the other hand, he is not in favor of the American government paying over 129% of the prices that other nations pay for the same drugs.

Democratic Opposition

Key Democrats are not in favor of the measures saying that his "half-baked proposals would be struck down in court." The Pharmaceutical Care Management Association will explore all possible litigation options to prevent the destabilization of the Medicare Part B and D programs.

Although Trump initiated several proposals to make changes to the US Healthcare system by implementing cost-cutting measures, drugs' prices continued to spiral out-of-control. But as a light at the end of the tunnel, drug prices increasingly slowed as the US economy expanded.