TrumpRx

[LuFins Dad]

@jon-nyc said in TrumpRx:

The US largely pays for drug development. The rest of the world largely pays marginal production cost +.

That’s an unsustainable imbalance. But like most large international imbalances it can’t be fixed overnight and trying to do so will break shit.

Please provide reasoning for this? I don’t see where lowering US prices and raising other countries prices to some semblance of equilibrium would break shit. And I don’t think there would be too much consternation over poor nations and third world countries getting favorable prices, but when Germany’s prices are 1/3 the price of the US? Canada’s are 1/4?

In this case the what will break is drug development. Especially for rare diseases. Unless they exempt them.

Why? Drop US prices 50%, and raise the rest of the developed world’s rates 100%. Their prices would still be less than the US, and the US purchasers would still get some relief as well.

We do need to fix it but that would take time and patience plus negotiating with our allies other first world countries. Things that are not particularly Trump’s strong suits.

That’s a cop out answer. Like saying getting NATO nations to actually carry their promised weight would take patience and diplomacy, not Trump’s suits… Turns out that threatening to kick down the house of cards worked pretty well there.

[jon-nyc]

It’s arithmetically possible but politically not so much.

How many countries are willing to find a percent or two of gdp in short order to lower prices for Trump? Drug companies have to negotiate with them on individual drugs. It takes ages when new drugs come out. At least for the pricey ones.

[Klaus]

Is it really true that drug companies make that much more in the US compared to, say, Germany?

I know that some drugs, especially generic ones, are definitely cheaper in the US.

The companies can decide at which price they want to sell. Why do they give Germans better prices than Americans? Sounds like the American insurance companies are just bad at negotiating, then?

[jon-nyc]

Bargaining is fragmented here, centralized there. And bargaining here is ultimately limited by the fact that the law requires certain classes of drugs to be covered. Also I think our patent protection is longer.

You’re right about generics - they are a bit cheaper here. But brand name prescription drug prices are ~2-4x the cost.

[jon-nyc]

said in TrumpRx:

Interestingly Pfizer, GSK, Sanofi, and JnJ are all up today. Maybe they’re just screwing the retailers and the PBMs.

There seem to be two theories as to why big pharma stocks are up.

Theory A:

“This represents a win for” Pfizer, Akash Tewari, a Jefferies analyst, wrote in a note to clients Wednesday. He estimated that offering some new drugs at internationally comparable prices could cost Pfizer up to $723 million a year. That would amount to just over 1 percent of Pfizer’s $63.6 billion revenue last year.

Pfizer “may have done the rest of the industry a favor by giving a framework for a bespoke solution that we feel would be very tenable” for other big pharmaceutical companies and “would have a de minimis impact on their business going forward,” Tewari wrote.
Details on the pact are scant and terms remain confidential: of the three Pfizer drugs to be sold at discounts and announced at this week’s news conference, none are top sellers.
Many of the cuts Pfizer is promising are aimed at the government Medicaid program, which analysts say account for less than 5 percent of the company’s U.S. revenue. And Pfizer’s agreement to list discounted drugs for direct purchase on the president’s TrumpRx website resembles an initiative already being promoted by the industry.

Theory B:

A White House official characterized the rising Pfizer stock price as evidence that investors believe other countries will now “pay their fair share” as part of an international rebalancing of prices.