From Robert Reich Blog
HHS Sec. Alex Azar on Prescription Prices May 11, 2018
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Trump promised to rein in drug prices. It was his only sensible campaign promise.
But the plan he announced Friday does little but add another battering ram to his ongoing economic war against America's allies.
He calls it "American patients first," and takes aim at what he calls "foreign freeloading." The plan will pressure foreign countries to relax their drug price controls.
America's trading partners "need to pay more because they're using socialist price controls, market access controls, to get unfair pricing," said Alex Azar, Trump's Secretary of Health and Human Services, who, perhaps not incidentally, was a former top executive at the drug maker Eli Lilly and Company.
By this tortured logic, if other nations allow drug companies to charge whatever they want, U.S. drug companies will then lower prices in the United States.
This is nonsensical. It would just mean more profits for U.S. drug companies.
While it's true that Americans spend far more on medications per person than do citizens in any other rich country -- even though Americans are no healthier -- that's not because other nations freeload on American drug companies' research.
Big Pharma in America spends more on advertising and marketing than it does on research -- often tens of millions to promote a single drug.
The U.S. government supplies much of the research Big Pharma relies on through the National Institutes of Health. This is a form of corporate welfare. No other industry gets this sort of help.
Besides flogging their drugs, American drug companies also spend hundreds of millions lobbying the government. Last year alone, their lobbying tab came to $171.5 million, according to the Center for Responsive Politics.
That's more than oil and gas, insurance, or any other American industry. It's more than the formidable lobbying expenditures of America's military contractors. Big Pharma spends tens of millions more on campaign expenditures.
They spend so much on politics in order to avoid price controls, as exist in most other nations, and other government attempts to constrain their formidable profits.
For example, in 2003, Big Pharma got a U.S. law prohibiting the government from using its considerable bargaining clout under Medicare and Medicaid to negotiate lower drug prices. Other nations with big healthcare plans routinely negotiate lower drug prices.
During his campaign Trump promised to reverse this law. But the plan he revealed Friday seeks only to make it easier for private health insurers to negotiate better deals for Medicare beneficiaries.
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