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Smart Thinking blog

Insights and expert advice on the key issues facing today’s pharma marketer

Trump attempts The Art of the Deal with pharma

Yet incendiary language, bullying and threats rarely lead to a deal

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The President of the United States recently unveiled his long-awaited plan to lower prescription drug prices in America. Trump’s plan, called American Patients First, The Trump Administration Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs is a 44-page document that was released in mid-May. The plan seeks to increase competition, improve negotiation and create incentives to lower list prices of prescription drugs and out-of-pocket costs for consumers. Some of the steps it outlines are rebate-sharing in Medicare drug plans, promoting generics and copycat version of biologic drugs and requiring drug manufacturers to publish list prices for drugs in television advertisements.

It has been said that serving in public office builds character. In Trump’s case, it reveals character.

Make no mistake about it. This is about getting a deal. This is not about patients. Or levelling the playing field for all stakeholders. Or a long-term plan that allows Medicare to negotiate drug prices directly with manufacturers – as he promised during his 2016 campaign. This is about positioning the issue as ‘us’ vs ‘them’.

Don’t believe me? Here’s what else Trump said upon unveiling his administration’s plan. “It’s time to end the ‘global freeloading’ once and for all”, referring to how some countries set price controls and therefore pay less for drugs than Americans, while US companies invest in research and drug development. He said he has directed US Trade Representative Robert Lighthizer to make fixing this a top priority with every trading partner. “We have great power over the trading partners,” he said. “You’re seeing that already. America will not be cheated any longer and especially will
not be cheated by foreign countries.”
Like Trump’s thinking on steel tariffs, his view on the trade imbalance with China and his perspective on NAFTA (North American Free Trade Agreement) with Canada and Mexico is always about the ‘bad’ deal that America has had to absorb. The Paris climate accord and the Trans-Pacific Partnership? More examples of bad deals.

Trump wants the rest of the world to pony up its fair share. The plan states that the US Department of Health & Human Services has identified four challenges in the American drug market. And one of them is ‘foreign governments’ free-riding of American investment in innovation’. Let’s not forget that much of the bench research and drug discovery process for a single therapy is a collaborative effort involving hundreds of people across the globe. And the pivotal registration trials that form the basis for a new drug submission include patients from around the world. And quite often, the manufacturing and supply chain for a therapy involves plants, distribution centres and manufacturing sites located outside the United States.

The plan is clear on the issue: the existence of single-payer systems and the imposition of drug price controls as well as the practice of external price referencing are the culprits. You see the thinking goes something like this: “Every time one country demands a lower price, it leads to a lower reference
price used by other countries. Such price controls, combined with the threat of market lockout or intellectual property infringement, prevents drug companies from charging market rates for their products.” The irony here is obvious. In the United States, drug companies are charging market rates with a few exceptions (Veterans Affairs) and this is the problem. Not the other way around.

His views on almost every issue are part isolationist and part protectionist. The language he and his administration use to frame issues are confrontational and designed to evoke nationalistic pride. It is unfortunate that one country’s inability to reign in runaway drug prices is being spun as partly a function of being cheated by foreign countries. It is dismaying that the global contribution required to bring a therapy to the market is ignored. And it is distressing that he promotes himself as an artful dealmaker. Incendiary language, bullying and threats should never be framed as ‘art’ and they certainly never lead to a ‘deal’.

Rohit Khanna is Managing Director of Catalytic Health, a healthcare communications, advertising and strategy agency. He can be reached at:  rohit@catalytichealth.com

3rd July 2018

From: Healthcare

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