Trump said his administration would take aim at the “middlemen” in the drug industry who became “very, very rich,” an apparent reference to health insurers and pharmacy benefit managers (PBMs). He also said the pharmaceutical industry is making an “absolute fortune” at the expense of American taxpayers.”Everyone involved in the broken system – the drugmakers, insurance companies, distributors, pharmacy benefit managers, and many others – contribute to the problem,” Trump said. Trump campaigned on lowering prescription drug prices ahead of the 2016 presidential election, even accusing drugmakers of “getting away with murder.” Healthcare investors had braced for months for more direct attempts to regulate U.S. prices that would cut into industry profits. But Trump has since abandoned ideas to lower drug costs he supported during the campaign, including allowing the government’s Medicare plan for older Americans to negotiate prices directly with drugmakers, and enabling U.S. consumers to import lower-cost medicines from other countries. On Friday, Trump’s senior health officials outlined more modest policy proposals to introduce more competition among drugmakers and pass on savings to consumers. Critics said the policies pointed to the influence the pharmaceutical industry wields with the administration.
“I think very expensive champagne will be popping in drug company boardrooms across the country tonight,” said Democratic Representative Elijah Cummings.
Senator Ron Wyden, also a Democrat, said the proposals “amount to asking drug companies nicely to lower their prices with zero accountability.” Shares of major drugmakers, insurers and PBMs rose after the speech. The S&P 500 healthcare index, a broad gauge of large healthcare stocks, closed up 1.5 percent, its biggest single-day percentage gain in a month. “The plan was a lot less aggressive than investors expected,” wrote Alex Arfaei, analyst at BMO Capital Markets. The U.S. Food and Drug Administration would evaluate requiring drugmakers to include the list prices they set on medicines in their advertising. Drugmakers argue that list prices do not reflect actual cost after discounts and rebates.
Regarding forcing other countries to pay more for drugs, Richardson said: “We don’t really have the policy levers to get that to happen.”