President Donald Trump has taken pharma to task over high drug prices before, most notably with the statement that pharma is "getting away with murder." Now the president claims the industry, in response to administration pressure, is nearly ready to do something far from its normal business model: offer "massive drops" in prices.
The thing is, not only would lowering list prices be a novel move, industry sources told Politico they didn't know anything about such a plan.
Trump made the remarks on Wednesday at a signing ceremony for the "Right to Try" legislation, an unrelated bill that recently made its way through Congress. At the ceremony, he said because of the administration's recent plan to lower prices, some big pharma companies are "going to announce voluntary massive drops in prices." One component of the administration's pricing plan is to offer incentives to lower list prices.
The Trump administration unveiled its drug pricing plan earlier this month. Rather than a wholesale reform of the drug pricing system, the plan calls for more generic competition, more Medicare negotiation on prices and efforts to help patients with lower out-of-pocket costs, all measures the industry seems prepared to swallow.
One industry consultant told FiercePharma it'll be "business as usual" for pharma in the short term. Analysts mostly said the proposals are positive for industry.
Last year, Johnson & Johnson, Merck and Sanofi reported net price declines after negotiations with payers. But if the president was referencing price reductions after rebates and discounts, that wouldn't be "big news" as his remarks suggest. Pharma companies routinely lower their prices after negotiations in order to gain formulary access.
After Trump's pricing speech earlier this month, Health and Human Services Secretary Alex Azar followed up with his own remarks offering more details about the plan. On list prices, Azar said the administration hopes to reverse an Affordable Care Act provision that capped the penalty drugmakers had been paying when they increased prices faster than inflation. He said 2,500 drugs have already hit the cap.
Azar also suggested Trump will use his bully pulpit as a negotiating lever for the administration's dealings with pharma. He said the president will be "very interested in the next company that takes a price increase not justified by inflation or change in clinical benefit," Azar said.
"I can tell you I wouldn’t have wanted to be the one to do that," Azar added. On the flip side, Azar said Trump "will be interested in hearing which companies lowered their prices and took other actions to support the changes we want to make."
Trump has previously said he'll use Twitter to take on pharma, and he's already called on Merck to lower its "ripoff drug prices" after CEO Ken Frazier quit a manufacturing council in the wake of Trump's equivocal response to white supremacist violence in Virginia. Aside from that tweet, Trump has called out Boeing and Lockheed Martin for airplane prices and weighed in on Amazon's tax situation.
It remains to be seen whether Trump's latest comment will bring any major changes to drug pricing, or whether it was another off-the-cuff remark from an erratic president. In either case, it won't be long before industry watchers know; Trump said the announcement is expected in two weeks.