President Trump met Tuesday with the heads of several pharmaceutical companies at the White House. During the Oval Office meeting, Trump discussed bringing more pharmaceutical jobs back to the U.S. and making drugs more affordable.
He urged the drug companies, which included Johnson and Johnson, to bring more jobs back to America, saying, “So you have to get your companies back here. We have to make products…” “We have no choice,” he added in typical Trumpian fashion.
He called on the execs to lower drug prices, which are exorbitant, saying, “We have to get prices way down.”
Trump’s first point was similar to what was discussed in his CEO meeting last week.
His criticism of pharmaceutical price gouging is certainly valid. Over the summer, Mylan Pharmaceuticals was targeted for jacking up the price of the EpiPen, an epinephrine auto-injector for those with allergies.
The reasons for the price increase are simple. Thanks to the FDA’s stringent approval process, the EpiPen has almost zero competition in the U.S. market. Because of the inelastic demand for the EpiPen, Mylan was able to set the price arbitrarily and still sell tremendous amounts of its product.
In addition, after Obamacare was implemented, insurance companies began to cover less and less of the EpiPen’s cost, shifting the difference onto consumers. Patients previously shared little of the burden, but hysteria began when they were forced to pay more of the total price.
So, the solution to the exorbitant prices seems to be allowing competition through FDA deregulation and letting market forces to drive down the price.
That’s not, however, how the Left sees the problem. Their solution, unsurprisingly, is price controls. As we have seen with Obamacare, fixing prices leaves consumers with fewer options because many insurance providers (or in this case manufacturers) are priced out of the market.
President Trump thankfully didn’t live up to his promise to ‘negotiate’ Medicare drug prices. He did, however, vow to make the FDA regulation process less stringent and costly. It currently costs millions to get a single drug approved, leading to a lack of development of drugs for rare diseases and condition because with fewer customers buying the drug, the costs of research, development, and approval may outweigh the profit motive.
In addition, many patients have died and will die while waiting for drugs they desperately need to meet the FDA’s strict standards for approval. Of course, the FDA is never blamed for these deaths. It is, however, blamed when it approves a drug that isn’t entirely safe and folks die from it. Thus, the FDA has an incentive to save face by being extra cautious when choosing whether to approve a medication.
In addition to deregulating the FDA, President Trump should reinstate a limit on the time allowed for the FDA to grant approval. Now, there is no limit, and the FDA, which is heavily influenced by lobbyists, can hold up approval indefinitely in many cases.
Both deregulation and reinstating a time limit for approval will increase competition and drive down prices for patients. This, along with repealing and replacing Obamacare, will lead to better, more affordable, and more available medication for all Americans.