Trump calls for lower drug prices, pushes on US production plants
Pharma industry leaders, including Novartis CEO Joe Jimenez and Merck & Co. chief Kenneth Frazier, got their marching orders from President Donald Trump on Tuesday morning. Lower your prices, deliver "better" innovation and "move your companies back" to the U.S.
In a "pharma" meeting in the Oval Office, the President told executives from companies that they have done a "terrific job over the years" but that prices for drugs must come down.
"Our trade policy will prioritize that foreign countries pay their fair share for U.S.-manufactured drugs, so our drug companies have greater financial resources to accelerate development of new cures, and I think that's so important," Trump said.
"We have no choice," the President added, sitting at a table surrounded by aides, Vice President Mike Pence and eight pharmaceutical executives. "For Medicare, for Medicaid, we have to get prices way down, so that's what we're going to be talking about. We're also going to be streamlining the process so that from your standpoint so that when you have a drug you can actually get it approved — if it works — instead of waiting for many, many years."
The United States typically pays more for drugs than any other developed nation. Most Western European countries, as well as Japan, have government-run health care coverage under which drug prices are negotiated.
According to CNBC's Meg Tirrell, Ricks told Trump that his company is hiring manufacturing workers in the U.S. "as we speak," and Amgen's CEO said his company would be adding 1,600 jobs in 2017. Amgen and Lilly have each laid off more than 1,000 workers in recent years—Amgen said it would slash 15% of its workforce in 2014—and Lilly announced 485 job cuts just last week, mostly in its Alzheimer's division.
Jimenez, meanwhile, said last week that he’d like to raise his own solution for drug pricing—pay-for-performance deals that peg drug costs to their real-world results—in a face-to-face with the president.
"Obviously, we would love to in the coming months be able to sit down and talk with the administration about how we can be helpful in what is happening in the U.S. around the Affordable Care Act and also show him some of what we have done in terms of outcomes-based pricing and being a leader in that space,” Jimenez said during a company press conference.
According to the Department of Commerce, most pharmaceuticals consumed in the United States are made here; only about a quarter of drugs are imported, or about $86 billion in 2015. The top five sources of imports are Ireland, Germany, Switzerland, Israel and India. The industry also exported $47 billion in pharmaceutical products in 2015.
On Tuesday, Stephen Ubl, president of lobbying group Pharmaceutical Research and Manufacturers of America, or PhRMA, said the industry is open to working with the Trump administration on “market-based reforms.” He called the meeting “positive, productive.”
“Our industry takes seriously the concerns raised about the affordability and accessibility of prescription medicines,” Ubl said. “The current system needs to evolve to enable the private sector to lead the move to a value-driven health care system.”