by Mitch Kokai
Senior Political Analyst, John Locke Foundation
[P]erhaps the most consistent corporate target of President Trump’s ire has been pharmaceutical companies. He has long complained of “the injustice” of companies setting high drug prices in the U.S. while cutting deals with government-run health-care systems in other countries to sell the same drugs at cheaper prices. …
… The president’s jawboning has had some impact. Last Thursday, Merck & Co. Inc. joined Pfizer and Novartis AG in rolling back some prices and keeping others in line with inflation.
But what’s really expected to roil the economic waters that Big Pharma swims in is a series of White House initiatives that Trump, more than a year ago, signaled were coming. Last week, they were made clear with a torrent of announcements from federal agencies.
First, the Food and Drug Administration declared that it would crack down on the gaming of regulations that keeps drug prices artificially inflated or hinders competition from cheaper generic drugs. The FDA will try to end bottlenecks to the approval of cheaper, generic drugs.
Second, the FDA released a plan to promote the growth of biosimilars, which are generic copies of expensive drugs that fight diseases such as cancer or anemia. Branded drug companies have abused the rules on generic approval to hold up competition, costing American consumers billions. The Trump administration is finally going to bring real competition to this market, which represents fully 40 percent of U.S. spending on prescription drugs.