Economy

Trump’s orders on drug pricing have pharma industry tuned in for details

PT Jyothi Datta Mumbai | Updated on July 28, 2020 Published on July 28, 2020

US President Donald Trump

Is this a pre-poll rhetoric or Covid-driven concern?

US President Donald Trump’s meeting with representatives of Big Pharma, scheduled for Tuesday, will be watched closely by drug makers around the world including India.

The cost of delivering healthcare has always played a critical role in US elections and large drugmakers have often borne the brunt of the Presidential campaign rhetoric. This time may be no different, say industry watchers, adding, however, that Covid-19 could have changed things — the rising US toll from the novel coronavirus has hammered home the message of affordable and accessible healthcare.

The US President’s meeting with drug company heads comes after he signed four executive orders on drug pricing late last week. The aim was to get less expensive drugs for Americans by pricing them along the lines of that paid in other countries.

Trump called it the “granddaddy” of the orders signed and said it would “end global freeloading on the backs of American patients and American seniors. For decades, our citizens have paid the highest prices for drugs — prescription drugs — anywhere in the world...”

“Foreign nations have paid vastly less for the exact same drug — again, in the exact same box, from the exact same plant, from the exact same company. They would pay 10 per cent, 20 per cent, 30 per cent what our people are paying,” he said, adding that a pill that sold for $1 in some countries were priced at $ 7/8 in the US. “Same exact pill. We pay 80 per cent more than nations like Germany, Canada, and others for some of the most expensive medicines, identical in all respects,” he said.

‘Radical’ policy

Reacting to the development, Pharmaceutical Research and Manufacturers of America President and Chief Executive Stephen J. Ubl called it a “radical and dangerous” policy to pursue.

“The research-based biopharmaceutical industry has been working around the clock to develop therapeutics and vaccines to treat and prevent Covid-19. The administration’s proposal today is a reckless distraction that impedes our ability to respond to the current pandemic — and those we could face in the future. It jeopardises American leadership that rewards risk-taking and innovation and threatens the hope of patients who need better treatments and cures,” the PhRMA head said in a statement.

Discounts and reference pricing

While comment is being reserved just yet, an Indian industry expert said they will watch how Trump moves on removing discounts, allowing medicines from Canada and on reference pricing. Much will depend on details and implementation, the expert said. And, the present Government has just about 100 days left, he pointed out.

Interestingly, some multinationals follow a differential pricing policy in India, pricing their drugs much lower than its cost in the US.

India has a long relationship with the US, with the biggest Indian pharma companies shipping less-expensive, generically similar drugs and speciality medicines to the US. India accounts for about 40 percent of the generic medicines in the US and is home to the largest number of US Food and Drug Administration-approved plants outside the US.

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Published on July 28, 2020
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