The following article by Andrew Siddons was posed on the Roll Call website May 14, 2018:
Trump calls overseas costs unfair compared to U.S.
President Donald Trump took aim at “global freeloading” in his Friday speech on drug prices, putting an “America First” angle on a complicated policy issue. Although Trump’s rhetoric in the speech was fairly tough on the pharmaceutical industry, this issue was one area where Trump was borrowing a page from the Big Pharma playbook.
For all the resonance this part of the drug pricing debate might have with Trump and his political supporters, the administration’s accompanying policy blueprint had few details on how to address what other countries pay for prescription drugs. Questions remain over whether higher prices overseas would translate into lower prices in the United States.
“You can look at some of the countries, their medicine is just a tiny fraction of what the medicine costs in the U.S.A,” Trump said. “It’s unfair.”
The administration — and the drug industry — is particularly miffed that other wealthy nations, like Canada, South Korea and European countries, exert drug price controls through their government-controlled health care systems. At the same time, the administration and the pharmaceutical industry contend that American companies and taxpayers pay a disproportionate share of drug development costs, and are being shortchanged when foreign countries pay less.
Trump called the situation an “injustice” that he would direct U.S. Trade Representative Robert Lighthizer to bring up during trade negotiations.
“We have great power over the trading partners,” Trump said. “You’re seeing that already.”
A top target for the administration, and the pharmaceutical industry, is Canada. At the industry’s urging, the administration recently added Canada to a “priority watch list” of countries that the U.S. says partake in unfair trade practices.
When the U.S. added Canada to its watch list in an annual report on trade concerns in April, the Canadian policies it highlighted largely matched the concerns the pharmaceutical industry had raised.
The drug industry is worried that a recent policy change by Canada’s drug price review board could cost American companies $2.2 billion a year, and companies say the Canadian government has too much power to disclose information about drugs it says may present serious risks.
The U.S. is currently trying to renegotiate the North American Free Trade Agreement with Canada and Mexico.
The administration’s “American Patients First” blueprint proposed ways to address high drug prices, particularly in the realm of the Medicare system and approvals for lower-cost generic drugs. On the trade aspect, it simply said the government would investigate how to address foreign intellectual property violations and work “to develop the knowledge base necessary to address the unfair disparity.”
Reaction
When asked whether Trump could have some success extracting drug pricing changes from other countries, some observers think it’s possible.
“This president has entered into trade negotiations with a very different mindset than other presidents. If he is locked into this being a major piece of any type of trade negotiation, I would say yes,” said Michael Strazzella, a lobbyist who specializes in health policy at the firm Buchanan, Ingersoll & Rooney. He noted it may vary by country. In some cases, it could be a bargaining chip, while in others, it might be a non-negotiable demand.
A spot on the watch list that Canada was placed on can be a precursor to trade sanctions, said Peter Maybarduk, director of the Access to Medicines Campaign and consumer watchdog Public Citizen.