In reality, private health insurers don't have anywhere near the clout of Medicare and Medicaid -- which was the whole point of Big Pharma's getting Congress to ban such negotiations in the first place.
In the last few years, U.S. drug companies have also blocked Americans from getting low-cost prescription drugs from Canada, using the absurd argument that Americans can't rely on the safety of drugs coming from our northern neighbor -- whose standards are at least as high as ours.
Trump's new plan doesn't change this.
To put all this another way, when Americans buy drugs in the United States, they really buy a package of advertising, marketing, and political influence-peddling. Consumers in other nations don't pay these costs. Which explains a big part of why drug prices are lower abroad.
Trump's so-called plan to lower drug prices disregards this reality.
Trump's plan nibbles at the monopoly power of U.S. pharmaceutical companies, but doesn't deal with the central fact that their patents are supposed to run only 20 years but they've developed a host of strategies to keep patents going beyond then.
One is to make often insignificant changes in their patented drugs that are enough to trigger new patents and thereby prevent pharmacists from substituting cheaper generic versions.
Before its patent expired on Namenda, its widely used drug to treat Alzheimer's, Forest Labs announced it would stop selling the existing tablet form of in favor of new extended-release capsules called Namenda XR. Even though Namenda XR was just a reformulated version of the tablet, the introduction prevented generic versions from being introduced.
Other nations don't allow drug patents to be extended on such flimsy grounds. Trump's plan doesn't touch this ploy.
Another tactic used by U.S. drug companies has been to sue generics to prevent them from selling their cheaper versions, then settle the cases by paying the generics to delay introducing those cheaper versions.
Such "pay-for-delay" agreements are illegal in other nations, but antitrust enforcement hasn't laid a finger on them in America -- and Trump doesn't mention them although they cost Americans an estimated $3.5 billion a year.
Even after their patents have expired, U.S. drug companies continue to aggressively advertise their brands so patients will ask their doctors for them instead of the generic versions. Many doctors comply.
Other nations don't allow direct advertising of prescription drugs -- another reason why prices are lower there and higher here. Trump's plan is silent on this, too.
If Trump were serious about lowering drug prices he'd have to take on the U.S. drug manufacturers.
But Trump doesn't want to take on Big Pharma. As has been typical for him, rather than confronting the moneyed interests in America he chooses mainly to blame foreigners.
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