By Bruce WD Barren
“According to the Health Policy Institute, more than 131 million people, 66 % of all adults in the United States use prescription drugs or some 40% of our population. Utilization is particularly high for older people and those with chronic conditions. For them, prescription drugs are getting more costly by the day and there is where our focus most be as our population ages and becomes more dependent on them for an extended life.”
Another important fact is that according to The GoodRx 2019 End-of-Year Report 629 brand and generic drugs increased in price by an average of 8.2% in the United States.
This is higher than than the current annual inflation rate and considerably higher in the rest of the world.
Why and further, why should we support the rest of the world where drug prices are materially lower?
While prices for common generic drugs have dropped by 37% since 2014, branded drug prices have increased by over 60%. Here’s where the problem lies for that is what physicians are recommending, not generics but prescription drugs, especially the cost of lifesaving medications that millions of Americans, especially seniors, must rely on each day.
To me, it is time to focus on some basic needs of the American people and drug prescription costs is just one of them
Finally, our President, using his authority under his Executive Orders, has chosen to focus on this field too. Congress should had done it years ago, they should learn to serve us, not themselves
In an effort to “completely restructure the prescription drug market in terms of pricing,” President Trump signed several executive orders geared toward lowering the cost of prescription drugs Friday.
The ERs, which are subject to regulatory review, are meant to bring US drug prices down to at least be on par with what their costs are overseas.
But Americans should not expect to see the cost of a Rx drug drop immediately.
President Trump said Americans sometimes pay as much as 80% more for Rx drugs than citizens of Germany, Canada and other nations do for some of the most expensive medicines.
“The 4 orders I am signing today will completely restructure the prescription drug market in terms of pricing and everything else to make these medications affordable and accessible for all Americans.”
President Trump said at the White House. “Under my administration, we are standing up to the lobbyists and special interests and fighting back against a rigged system.”
One order specifically targets the high price of Insulin. It requires federal community health centers to pass discounts they receive on the drug and EpiPens directly to patients.
Another order allows states, pharmacies and wholesalers to import drugs from Canada where they typically cost less than in the US.
Currently, it is mostly illegal to import medications from abroad for personal use, according to the FDA.
The 3rd order blocks “middlemen” or pharmacy benefit managers from keeping “gigantic discounts,” President Trump said.
There is a rebate system in place where drugmakers award discounts to pharmacy benefit managers, often in exchange for more favorable insurance coverage for their drugs.
President Trump said he would hold off on signing the 4th order because it may not be needed. The order would allow Medicare to purchase drugs at the same price other countries pay through an “international pricing index.”
“Everyone will get a fairer and much lower price,” President Trump said. “Under our ridiculous system, which has been broken for decades, we are not even allowed to negotiate the price of drugs.”
In order to give the industry time to “come up with something” that would cut back on drug prices, President Trump said he will hold off on signing the 4th order until 24 August.
Drug company executives are scheduled to meet at the White House Tuesday.
Editor’s Note: Economist Bruce WD Barren is Chairman of The EMCO/ Hanover Group. He is a regular contributor to Live Trading News.
Have a healthy week, Keep the Faith!