KEY TAKEAWAY: Although Mr Trump has caved to pharma it would be a huge mistake for pharma companies to think they have won the battle. This battle is not going to end and is going to continue to heat up until it results in action.
According to Bernie Sanders “the five largest drug manufacturers made more than $50 billion in profits in 2015 . Meanwhile, nearly 1 out of 5 Americans could not afford the medicine they were prescribed. The result: Millions of Americans became sicker, and some ended up in emergency rooms at great cost. Others unnecessarily lost their lives”.
“It is beyond comprehension that while Americans are suffering and dying because they cannot afford the medications they need, the 10 highest-paid chief executives in the pharmaceutical industry collectively made $327 million in 2015. These executives get richer while Americans die. That’s not acceptable.”
Mr Sanders goes on to say “The root of this problem is that we are the only major country not to negotiate drug prices with the pharmaceutical industry . You can walk into a pharmacy today and the price could be double or even triple what you paid for the same medicine a year ago, and there are no legal barriers in place to stop these arbitrary increases. Pharmaceutical corporations can raise prices as high as the market allows. If people die, it is not their concern. If people get sicker, it is not a problem for them.”
The WSJ followed the meeting with this comment “President Donald Trump pledged to speed up regulatory approvals for new drugs and make the process less expensive, a positive for the pharma industry, especially smaller biotechs. Drug stocks traded sharply higher , while most of the stock market sold off. That was premature; it will take months to sort out whether it is truly business as usual for the beleaguered sector. But more uncertainty from industry earnings ought to postpone any sense of relief.”
While healthcare companies are pointing fingers at each other, they risk getting slammed all together by Mr. Trump’s effort to cut costs. Investors should be prepared for another bumpy year.
Yesterday I viewed a focus group talking about drug prices and the drug industry and it wasn’t pretty. They all talked about how they are paying more for Rx drugs, even though they have employer health insurance and asking for generic medications where possible. They believe that prescription drugs do save lives, but they have bought into the story of high profits and excessive CEO pay.
Now the pharma industry has been talking about high R&D costs, but what they forget to mention is that for a lot of companies R&D has been replaced with an acquisition strategy. How can a pharma CEO take home millions of dollars in pay when there is a high probability that someone somewhere cannot afford their medication?
I love this industry because I personally get a sense of deep satisfaction helping people discover new treatments but while CEO’s cater to Wall Street people are suffering and that I find hard to take.
Originally published at worldofdtcmarketing.com on February 4, 2017.