We’ve heard it before: President Trump wants to lower the cost of prescription drugs. In reality, Trump and his Republican allies have done everything possible to protect the rigged system for drug companies. In 2017, America’s largest pharmaceutical companies got a huge tax break from the Trump tax bill, and they have continued to line the pockets of shareholders and CEOs while raising prices for everyday Americans.
Trump has repeatedly promised to address rising drug costs, but nearly all of his proposals have been put on hold or blocked by the courts. Without evidence, Trump has claimed that drug prices have gone down under his administration. During his 2020 State of the Union address, Trump claimed that “I was pleased to announce last year that, for the first time in 51 years, the cost of prescription drugs actually went down.” This has been debunked by multiple independent fact-checkers.
Trump had four years to take action on drug prices, but instead he did nothing. Now, as the nation continues to battle the coronavirus crisis and Trump trails former Vice President Joe Biden in the polls, he has returned to the empty promises, cognizant that health care remains the top issue heading into the election. Meanwhile, even as the nation faces an unprecedented health care crisis, drug companies have continued to hike prices and take advantage of the system. At a time when controlling the cost of prescription drugs has never been more critical, Trump’s actions speak louder than his words.
Prescription drugs are prohibitively expensive for many Americans. While drug companies have continued to raise prices, Trump rewarded them with massive tax breaks and now opposes giving Medicare the power to negotiate for lower drug costs – the single most effective measure to do so.
- President Trump gave drug companies billions of dollars in tax breaks while they raked in massive profits and raised prices on Americans.
- Drug prices have continued to soar under President Trump.
- Trump opposes the single most important thing you can do to lower drug prices — giving Medicare the power to negotiate for lower prices.
- Trump has repeatedly talked about lowering prices based on costs in other countries, but independent experts have said his proposals would be ineffective.
Polling Reveals That Worries About Drug Pricing Are Only Getting Worse Under Trump
- Two-thirds of adults report that prescription drug prices have increased under Trump. This includes 81% of Democrats, 70% of independents, and 47% of Republicans.
- A November 2019 Gallup survey found that 58 million Americans were unable to afford prescribed drugs at least one time in the previous 12 months.
- Nearly 1 in 4 Americans (24%) have difficulty affording prescribed medications.
- Costs are of particular concern to those in fair or poor health — 49 percent of those in fair or poor health reported problems affording prescribed medications in 2019. Other groups more likely to report difficulties affording their medications include people with annual incomes less than $40,000 and people taking four or more drugs every month.
- 30% of 50-64 year olds reported problems affording drugs.
- A July 2020 Gallup survey found reports of medication insecurity have risen by “statistically significant levels,” rising from 19 percent of adults in early 2019 to 24 percent in 2020.
- Nearly 9 in 10 Americans fear that drug companies will use the pandemic as an excuse to raise prices.
- Polls consistently show nearly nine in 10 Americans support allowing Medicare to negotiate for lower drug prices. A recent Gallup poll found that 88 Percent support government negotiation to control the cost of Covid-19 treatment.
Trump’s Failed Record and Broken Promises on Drug Pricing
Drug Prices Have Soared Under Trump. The Kaiser Family Foundation estimated that list prices for 20 of the top 25 drugs covered by Medicare Part D saw price increases between three and nine times the rate of inflation in 2017. A report from AARP found that the annual cost for 267 brand name medicines commonly used by seniors increased by 5.8 percent in 2018, more than twice the rate of inflation. In 2019, more than 4,000 drugs saw price increases averaging 21 percent according to Rx Savings Solutions.
Drug prices are steadily rising even as the nation fights the coronavirus crisis: according to an analysis from GoodRx, pharmaceutical companies have logged more than 800 price increases in 2020 so far. A new report from IQVIA confirms Americans’ spending on prescription medicines continues to rise, with total out-of-pocket expenses increasing from $74 billion in 2015 to $82 billion in 2019.
Empowered By Trump, Drug Companies Are Already Taking Advantage Of The Coronavirus Crisis. Gilead Sciences sought rare disease status for its coronavirus treatment Remdesivir, which is potentially worth millions in tax breaks. The company only rescinded its request for exclusivity after a public outcry. Gilead later set remdesivir’s price at $3,120 for a course of treatment –while charging other countries $2,340– after U.S. taxpayers spent $99 million on its development. Data from GoodRx revealed that other drugs treating respiratory illnesses have already seen above-average price increases in 2020. One drug company even tripled the price of a medication as it pursued coronavirus use. Unsurprisingly, drug companies working on Covid-19 treatments and vaccines have boosted their lobbying expenditures during the pandemic.
Americans Pay More For Drugs Than Do People In Any Other Country. At $1,229 per capita, people in the U.S. spend more on pharmaceuticals per capita than do people in any other country in the world. British researchers found that U.S. prices were consistently higher than in other European markets, six times higher than in Brazil, and 16 times higher than in the lowest-price country, which was usually India.
Drug Companies Are Engaging In The Dangerous Practice Of Price-Gouging — Pursuing Massive Profits To The Detriment Of People Who Need Their Medication To Survive. In September 2018, Nostrum chief executive Nirmal Mulye defended his choice to raise the price of an antibiotic from $474.75 to $2,392 a bottle, saying he had “moral requirement…to sell the product for the highest price.” In 2017, Mylan, the company that made the EpiPen, came under fire for charging $609 for a box of two devices even though each only contained about $1 worth of the drug epinephrine. The cost of the four most popular types of insulin have tripled over the past decade, with the average price per month rising to $450 in 2016. As costs continue to rise, as many as one in four of the 7.5 million Americans dependent on insulin are skipping or skimping on doses.
A 2019 report from the Institute for Clinical and Economic Review found that price hikes on seven prominent drugs cost Americans more than $5 billion over two years. Arthritis drug Humira topped the list, costing Americans an excess of $1.9 billion in co-pays, out-of-pocket costs, and premiums between 2016 and 2018.
Pharmaceutical Companies Are Raking It In
Pharmaceutical Companies Reaped Huge Benefits From The Trump Tax Bill. The Trump tax scam means billions of dollars in tax breaks for pharmaceutical companies. The year after the tax bill passed, the largest drug companies made $50 billion in profits and subsequently used their savings to invest billions more in stock buybacks for their shareholders. According to Axios, the year after the Republican tax law went into effect, the 12 largest American pharmaceutical companies spent $69.1 billion on stock buybacks, compared to investing $65.9 billion on research and development.
Drug Companies Continue To See Massive Profits. Pharmaceutical companies raked in more than $30 billion in profits in the third quarter of 2018, with Pfizer alone bringing in $4.1 billion — the highest of any publicly traded health care company. Of the 19 companies that tallied at least $1 billion of third-quarter profit, 14 were drug companies. These trends continued into 2019, with Axios reporting “quarter after quarter after quarter shows drugmakers continue to wield the highest profit margins in the industry,” adding that “nothing has fundamentally changed for drug companies even though the Trump administration is tinkering with ideas on how to lower what people pay for their prescriptions.”
Even in the middle of the pandemic, the pharmaceutical industry is still thriving, with nine of the 10 biggest 2020 Q2 health care industry profit margins belonging to drug companies. And drug companies working on coronavirus treatments and vaccines are already reaping the benefits: after starting its late-stage trial for a coronavirus vaccine, Moderna’s stock soared by 9 percent, raising the company’s value to $31 billion despite having no FDA-approved drugs on the market.
CEOs And Executives Are Cashing In. According to a 2017 Axios study, the CEOs of 70 of the largest U.S. health care companies cumulatively have earned $9.8 billion since 2010. CEOs took home nearly 11 percent more money on average every year since 2010 — far more than the wage growth of nearly all other workers. In 2017 alone, 30 health care executives made a combined $976 million.
According to the New York Times, senior executives and board members from at least 11 pharmaceutical and medical companies have been reaping the benefits of potential coronavirus treatments and vaccines, selling shares worth well over $1 billion since March. Top executives and board members from Regeneron sold $700 million in stock since announcing a collaboration with the federal government to develop a Covid-19 treatment. Moderna CEO Stephane Bancel more than tripled the number of his company shares to be sold days after the company announced positive early results for its coronavirus vaccine, raising his stake in the company to about $3 billion, compared to $600 million at the beginning of the year.
Republicans Are Making It Worse
Republicans Refuse To Let Medicare Negotiate For Lower Drug Prices. Though 88 percent of Americans support allowing the federal government to negotiate drug prices for Medicare beneficiaries, Republicans refuse to let Medicare negotiate drug prices. In December 2019, House Democrats passed the Lower Drug Costs Now Act to reduce the price of drugs for every American family by allowing the government to directly negotiate for lower drug prices for people with private insurance as well as Medicare. The bill would save households $158 billion over seven years. Despite his multiple campaign promises to let Medicare negotiate, Trump opposes the House’s plan.
Trump Installed Big Pharma Executives In Key Administration Posts. President Trump installed a former Eli Lily executive, Alex Azar, as his secretary of Health and Human Services and his appointment of Scott Gottlieb at FDA was described as “music to pharma’s ears.” Other pharma lobbyists writing Trump’s health policy include chief of staff at FDA, Keagan Lenihan, who joined the administration after lobbying for the drug distribution giant McKesson, former Gilead lobbyist, Joe Grogan, who served as a senior advisor on health policy until his resignation in April 2020.
Trump’s Proposals Always Fall Far Short Of His Promises. President Trump repeatedly promised that he would allow Medicare to use its buying power to negotiate drug prices directly with suppliers, but after meeting with pharmaceutical executives early in 2017, Trump abandoned that pledge, calling it “price fixing” that would hurt “smaller, younger companies.” In 2018, Trump released a “blueprint” to lower drug prices, but the main proposals have been put on hold or blocked by the courts. The D.C. Circuit Court of Appeals recently struck down Trump’s rule to require drugmakers to disclose prices in television ads. Trump also announced that drug makers agreed to participate in a voluntary program to limit insulin costs for certain Medicare beneficiaries, which officials acknowledged could actually result in higher premiums for beneficiaries and taxpayers.
Trump recently signed four executive orders aimed at reducing drug costs, but experts were quick to point out that the measures were very limited and none were immediately enforceable. Pharma CEOS have themselves said they are “not expecting any impact” from these executive orders.
The Administration Has Consistently Advocated For The Repeal Of The Affordable Care Act, Including Eliminating The Requirement That Insurance Companies Cover Prescription Drugs. After failing to repeal the health care law, Trump took his war on America’s health care to a new level and went to court seeking to strike down the entire Affordable Care Act. If President Trump and Republicans have their way, 23 million Americans will lose their insurance coverage, 135 million Americans with pre-existing conditions will be stripped of their protections, and costs will go up for millions. The ACA includes several measures to lower drug costs, including its requirement that insurance companies cover patients’ prescription drugs, rules that increase competition in the prescription drug market and help Americans access cheaper drugs, and consumer protections that prohibit drug companies from paying off doctors behind closed doors to influence the drugs they prescribe to patients. And without the ACA, nearly 12 million seniors will have to pay more for prescription drugs because the Medicare ‘donut hole’ will be reopened.