While “America First” is a rallying cry for supporters of President Donald Trump, one thing they don’t want to be first in is prescription drug pricing. Following up on last week’s proposal to mandate the displaying drug pricing in TV ads, the US President took aim at the pharmaceutical industry for charging more in the States as compared to other industrialized nations. He criticized those countries for freeloading on the US’s inflated prices saying, the “American middle class is effectively funding virtually all drug research and development for the entire planet.” To address this, the Department of Health and Human Services released a proposal that would tie Medicare Part B payments for medicines to the levels that other nations pay. HHS Secretary Alex Azar did note this could cause companies to stop selling some drugs in other countries… probably not a big concern for the America First crowd.
Ahh, the US healthcare system…all the s#!t we don’t know until it comes out in the news. Did InsightCity’s US readers know that many pharmacists are under gag orders to NOT inform you when you could spend less money on a prescription? That’s right, if the cash price for your drug is lower than the co-pay that was negotiated by your insurance plan, the pharmacist may not have been allowed to tell you. Well, President Donald J. Trump—a long-time fan of gag orders 😊—has just signed a law that bans these particular gag orders, and while the law does not require a pharmacist to inform the customer of a lower price, it does prohibit the prohibition. Or something like that. Shut up. You know what I mean. Just ask your pharmacist if the cash price is lower than your copay. Also, the law doesn’t go into effect for 2 years. What the…?
It’s the age-old question that gets at your risk profile. Drug Channels has provided a wonderful analysis of Fortune 500 companies that are involved in the drug channel business (McKesson, CVS, Express Scripts) and pharma companies (Pfizer, Amgen, Biogen). Highlight #1 – The average revenue for the 7 drug channel companies ($131B) is 4x greater than the 11 pharma companies ($29B). Highlight #2 – Profit, as a percent of revenue, is ~7x greater for the pharma companies (14.6%) than for the drug channel companies (2.2%). Highlight #3 – The return to investors was dramatically higher for pharma (14.9%) than for drug channel companies (-9.3%). Can anyone say Amazon? Can anyone say Trump? It looks like either selling shovels or mining for gold seems like a pretty good proposition, but remember we are looking at the best of the best in this analysis.
American Patients First. Catchy title. Unless you’ve been under a rock, you’ve likely heard of President Trump’s “sweeping” drug pricing proposals. While it’s way too complicated a topic to cover in our typical article length, we’re going to provide some of the better summaries. First is a nice summary about how this could impact the drug distribution system. Second is about how PhRMA increased its lobbying by 30% in 2017. Third is how Wall St. reacted in a positive manner on Friday, signaling Wall St. isn’t scared of the Trump plan for drug makers. Our last point is how Health & Human Services (HHS) Secretary Alex Azar said pharmacy benefit managers (PBMs) are a prime target in the effort. There will be lots more to digest in the future as the plan is unraveled. As the Brits say, keep calm and carry on.
Replacing President Trump’s initial pick to lead the US Health and Human Services department is recent Eli Lilly alum Alex Azar. Trump expects that experience will give him a good grip on how to better deliver healthcare and lower drug prices. However, some critics are unhappy about the appointment of a “Big Pharma” figure to run the US’ most well-funded department. Eli Lilly and other large drug makers like Johnson & Johnson and Merck have actually made some advances in drug pricing transparency recently. Earlier in 2017 they released high-level reports explaining price hikes, and shifted the blame for high healthcare costs to other players like PBMs. However, these too were criticized for not being granular enough. Well, you can’t please everyone.
Remember when Michael Scott declared bankruptcy, only to learn that just shouting the word “bankruptcy” doesn’t make it official? That’s what people are telling President Trump right about now about his August “declaration” that the U.S. opioid crises is a national emergency. More than 2 months later this is yet to be made official. This writer has no idea how easy or difficult it is to make an official emergency declaration, but time is of the essence. According to the Centers for Disease Control (CDC), 33,000 Americans die each year—91 per day—from opioid overdoses. For context, about 41,000 American soldiers were KIA in all the years of the Vietnam War. Sure, POTUS has some big fish to fry but it’s probably time to jump on some paperwork.
Last week, Merck CEO Kenneth Frazier was among the first of many business leaders who left the White House’s American Manufacturing Council. The manufacturing heads cited President Trump’s comments following the protests and violence in Charlottesville, VA as the reason for their departure… and it snowballed from there with more CEOs resigning until Trump just dissolved it. Frazier’s presence on the council demonstrated the importance of drug manufacturing to the larger US manufacturing economy, and some lauded him for generating Positive Pharma Press™ by giving up his seat at that table. What’s Frazier up to next? Well according to the president, “Now that Ken Frazier of Merck Pharma has resigned from President’s Manufacturing Council, he will have more time to LOWER RIPOFF DRUG PRICES!” Ouch, Mr. President.
Just days after declaring his administration would throw law enforcement resources at the opioid crisis, The Donald referred to the crisis as a national emergency. According to an article by NPR, that stops juuuust a bit short of an official declaration of emergency status, which would carry with it access to specific legal authorities and access to government coffers for a more wide-spread, wholistic approach to dealing with the crisis. The President has indicated the official designation is forthcoming. This is significant. National emergency status has historically been used for things like natural disasters (i.e., hurricanes) and communicable diseases (i.e., the Zika virus). Here’s a list of declared U.S. public health emergencies. Once official, expect states like Ohio and New Hampshire—among the hardest hit—to seek federal funds for help.