A blueprint for Trump to address drug prices
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The America First Policy Institute — the think tank founded and staffed by Trump officials to advance his vision for the country — has written a new paper making the case against what it calls pharmaceutical "global freeloading" and outlining various policy measures to address it.
Why it matters: The policy paper — well-timed to the political moment and shared exclusively with Axios — signals that Trumpworld is serious about addressing the fact that the U.S. pays way more for prescription drugs than other countries.
- It also provides a messaging framework that flips some of the conventional drug pricing talking points on their head, managing to be both generally pro-pharma and against international price disparities at the same time.
- And, as is becoming common these days, the paper makes its case in terms friendly to the MAHA movement, especially through its focus on chronic disease.
What they're saying: "America, along with the rest of the developed world, we're dealing with some really crushing health care issues, some big, crushing chronic care issues, and prescription drugs are going to be part of the menu of things that Americans are going to need to deal with this really big crisis," said Charlie Katebi, the author of the paper.
- "And frankly, other countries have not been paying into the pool of innovation."
The big picture: Trump's first-term administration proposed tying U.S. prescription drug payments to what other countries pay for the same drugs, but the proposals were never implemented.
- Trump campaigned on a pledge to do something similar if given a second term, but his commitment to the issue was questioned after his campaign website removed a video of him pledging to take it on.
- That's led to a lot of will-he-or-won't-he in the two months since Trump's taken office. The policy paper — much more detailed than anything that's appeared on Trump's campaign site or come up in confirmation hearings — is a strong signal that big changes are indeed on the horizon.
- And perhaps most importantly, it sets up a counterargument to what's been traditional GOP thinking for decades, which is generally that government interference in pricing will come at the cost of new drug development.
- "This is not a zero-sum game. American patients can pay less, and we can still have innovation," said former Louisiana Gov. Bobby Jindal, the chair of AFPI's Center for a Healthy America.
By the numbers: List prices of brand drugs in the U.S. were on average more than four times higher in the United States than in other wealthy countries in 2022, according to a RAND study published last year.
- When accounting for rebates and other discounts, the study found U.S. prices for brand drugs were still more than three times higher.
State of play: Mehmet Oz, Trump's nominee to head the Centers for Medicare and Medicaid Services, last week became the latest high-ranking member of Trump's orbit to call out the pharmaceutical industry and drug prices.
- During questioning from one senator that referenced the U.S. paying multiple times what other wealthy countries pay, Oz responded in what's becoming pretty standard language from the new administration.
- "President Trump has been very clear that he wants me to reduce drug prices, not just for the government payees, but also for beneficiaries. International reference pricing is a way of doing that," Oz said.
- In HHS Secretary Robert F. Kennedy Jr.'s confirmation hearing, he was also asked about the topic, responding that "we should end that disparity" and that he's spoken with Trump about it.
Between the lines: The AFPI paper generally argues that other wealthy countries underpay for drugs, and that comes at the cost of new treatments and cures for everyone, including Americans.
- The main point of the paper is that the U.S. should find ways to stop other countries from "freeloading" off of American investment in R&D and the incentives the U.S. gives drug companies to develop more drugs via higher prices and thus profits.
- Bringing more drugs to market would increase competition, and forcing higher prices in other countries "would provide U.S. policymakers with greater flexibility to lower drug prices without harming innovation."
- Lower prices for Americans is presented as an almost secondary point. "Make no mistake about it: A big driver of this is also reducing prices for American patients. Certainly when I talked to the president, that was a very important emphasis," Jindal said.
The intrigue: The political beauty of the AFPI argument is that it tackles the idea that Americans are getting ripped off while removing the threat to innovation that drug pricing proposals usually are accused of posing.
- That could give cover for whatever comes next to more pro-pharma Republicans, while still satiating the part of the party that's grown irritated with the industry.
- "Just waving your hands and saying any attempt to reduce prices will reduce innovation — that won't fly," Katebi said.
