Despite Trump’s Drug-Price-Lowering Blueprint, High Costs Continue

In May, President Donald Trump announced his Administration’s drug pricing policy proposals, known as his “Blueprint To Lower Drug Prices.” President Trump promised that drug companies would announce voluntary drug price cuts within 2 weeks following the announcement of the Blueprint, however, according to a recent analysis by Associated Press (AP), there have actually been more price hikes than cuts.

For the analysis, AP analyzed 26,176 US list price changes for brand-name prescription drugs from January 1 through July 31 in the years 2015 through 2018. AP used data supplied by Elsevier and focused its analysis on the first 7 months of each year. The data examined by AP included more than 97% of price changes, and for many drugs, several dosages and drugs forms, such as pills, liquids, and injectable drugs were included.

According to the findings, AP determined that there were fewer price increases in 2018 from January through July compared with comparable prior-year periods, but companies still hiked prices far more often than they cut them. Specifically, through the end of July in 2018, there were 4412 brand-name drug price increases and 46 price cuts. Further findings demonstrated that in June and July—following Trump’s price cut prediction—the AP found there were 395 price increases and 24 decreases. The analysis also determined that two dozen cuts were up from the 15 decreases in those same 2 months last year but increases still outpaced decreases.

The AP also determined the median price increase, meaning half were higher and half lower, was 5.2% in June and July of 2018, down from 8% in that period in 2017, and the median price cut this June and July was 11%, which was smaller than in comparable periods in prior years.

In addition to the analysis, the AP asked 24 large drug companies over the summer if they planned to cut drug prices. Although some did not answer, none said they did. The AP found that drugmakers typically say they need to keep increasing the cost of existing drugs to pay for costly, lengthy research to develop new medicines.

 “We have a broken pricing system,” Peter Bach, head of the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center in New York, told AP. He said that the AP analysis demonstrates that there has been no big move to decrease drug prices.

According to AP, over the first 7 months of the year, there were 96 price hikes for every price cut. Alex Azar, HHS secretary, told AP in a recent interview that it will be a while before drug prices fall and that there is no “overnight solution.”

“I am not counting on the altruism of pharma companies lowering their prices,” Mr Azar told AP.

Although the AP analysis found that high drug prices are still rising, Mr Azar told AP that the administration is making progress on President Trump’s blueprint proposals. Mr Azar said that the administration has increased generic competition for old drugs and has given government prescription programs more negotiating power.

—Julie Gould