This story has been updated.
President Trump met with leaders of some of the world’s biggest pharmaceutical companies Tuesday and emphasized the need to lower “astronomical” drug prices, decrease regulations and bring more drug manufacturing into the United States.
Trump offered no specific policies, but mentioned increasing competition and “bidding wars” as a way to bring down prices. In the past, he has lashed out at the pharmaceutical industry for “getting away with murder” and threatened to use the government’s bargaining power to force down drug prices for programs like Medicare.
Most of Tuesday’s meeting was held behind closed doors, but Trump spoke to the media beforehand while surrounded by executives from a half-dozen large drug companies. He struck a less combative tone and didn’t mention government intervention directly.
“We have to get prices down for a lot of reasons. We have no choice,” Trump said, flanked by chief executives Kenneth Frazier of Merck and Robert Hugin of Celgene. “For Medicare, for Medicaid, we have to get the prices way down.”
In the past, pharma companies have railed against government intervention in pricing, saying those prices fund development of future, lifesaving drugs.
On Tuesday, Stephen Ubl, president of lobbying group Pharmaceutical Research and Manufacturers of America, or PhRMA, said the industry is open to working with the Trump administration on “market-based reforms.” He called the meeting “positive, productive.”
“Our industry takes seriously the concerns raised about the affordability and accessibility of prescription medicines,” Ubl said. “The current system needs to evolve to enable the private sector to lead the move to a value-driven health care system.”
Hugin of Celgene said the companies were excited to work with Trump on health-care reform.
“The changes he is proposing are ones that I think are going to be great for the country and consumers,” Hugin said.
In an afternoon news conference, White House press secretary Sean Spicer said Trump believes that allowing the federal government to negotiate with drug companies for Medicare would push prices lower — a policy that drug companies have opposed.
“You’ve got such purchasing power that’s not being utilized to the full extent,” Spicer said.
Trump asserted that position earlier this month in his first news conference after the election.
“PhRMA has a lot of lobbies, a lot of lobbyists, a lot of power. And there's very little bidding on drugs,” Trump said during the news conference in New York earlier this month. “We're the largest buyer of drugs in the world, and yet we don't bid properly. We're going to start bidding. We're going to save billions of dollars over a period of time.”
Still, Trump’s nominee to head the Health and Human Services Department, Rep. Tom Price (R-Ga.), declined to endorse that idea directly during a hearing before the Senate Health, Education, Labor and Pensions Committee two weeks ago. When Sen. Bernie Sanders (I-Vt.) noted that other countries have lower drug costs because they negotiate with firms to set prices for government purchases, Price replied that “there are a lot of reasons for that” and said he wanted to “get to the root causes of that.”
Price, whose nomination vote was rescheduled on Tuesday after Democrats boycotted the meeting, told Sanders that he would work to ensure that “drug prices are reasonable and individuals across the country have access” to needed prescriptions.
In the Tuesday meeting, it was unclear whether Trump was endorsing government intervention or market-based solutions to drug pricing.
Eli Lilly chief executive David Ricks, who attended the meeting, said in an investor call later Tuesday that Trump “did not get into elaborate policy detail in terms of the U.S. pricing environment.”
“I think we all understand the concern he’s raising” that consumers’ out-of-pocket costs are growing rapidly, Ricks said. He added that the pricing discussion focused in part on how drug companies could do a better job of “getting discounts through to consumers.”
Drug companies provide discounts on their drugs to companies that negotiate on behalf of insurers, and there is a growing discussion about the extent to which those rebates, granted in secret, trickle down to consumers.
Trump made concessions to the industry as well, saying he will ease regulations from the Food and Drug Administration to make it quicker to get drugs approved.
“We’re also going to be streamlining the process, so that, from your standpoint, when you have a drug, you can actually get it approved if it works, instead of waiting for many, many years,” Trump said.
Trump’s comments about speeding up drug approvals come as confusion swirls about how the FDA will be affected by recent executive orders, including one that imposed a federal hiring freeze.
There are many empty positions at the FDA, said Diana Zuckerman, president of the National Center for Health Research. The recently enacted 21st Century Cures law provided for additional hiring authority.
“But with the hiring freeze, will they be able to hire anyone?” she asked.
Another executive order, issued on Monday, requires that agencies remove two regulations for each new rule that’s promulgated.
“That will cripple the FDA’s ability to do anything other than regulate by nonbinding guidance documents,” said David Vladeck, a professor at Georgetown University Law Center. “To hollow out the agency’s authority by forbidding it from dealing with emerging issues through new regulations, and perhaps even giving guidance, will jeopardize consumers and threaten the reputation of the agency around the world.”
He also questioned Trump’s comments Tuesday about slashing drug-approval times at the agency, asking whether consumers wanted the FDA to rely on “comic-book” versions of drug applications.
Bringing jobs to the U.S.
Trump also focused on the need to create jobs and manufacture drugs in the United States.
Amgen, Novartis, Johnson & Johnson and the lobbying organization, PhRMA, were also present at the meeting — and emphasized their commitment to American manufacturing and jobs.
After Joseph Jimenez, chief executive of the Swiss pharma giant, Novartis, said that his company employed about 20,000 people in the U.S., Trump asked him if he planned to expand — then interjected that he meant within the United States.
“The rest I'm not too interested in,” Trump said.
Jimenez said that tax reform would be a “massive help” and Trump replied, “We'll get it.”
According to the Department of Commerce, most pharmaceuticals consumed in the United States are made here; only about a quarter of drugs are imported, or about $86 billion in 2015. The top five sources of imports are Ireland, Germany, Switzerland, Israel and India. The industry also exported $47 billion in pharmaceutical products in 2015.
Ireland has become a favorable location for pharmaceutical companies in part because of its low corporate tax rate. Company leaders have said that changes to the high corporate tax rate could make the United States a more favorable location for manufacturing or expansion.
Juliet Eilperin and Laurie McGinley contributed to this report.
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