New York, 27 June 2017 — A leaked draft of President Trump’s executive order on drug pricing reveals that the White House will perpetuate policies that have led to a broken biomedical research and development (R&D) system and raise drug prices around the world, said the international medical humanitarian organization Doctors Without Borders/Médecins Sans Frontières (MSF).
The leaked executive order, titled “Reducing the Cost of Medical Products and Enhancing American Biomedical Innovation,” proposes U.S. government interventions that will not meaningfully reduce drug prices in the U.S., and will provide pharmaceutical corporations greater latitude to further increase prices abroad.
“Every day, all over the world, MSF witnesses the human suffering caused by treatments being rationed or people being denied essential medical care due to high drug and vaccines prices,” said Jason Cone, executive director of MSF-USA. “Instead of responding to the global crisis of high drug prices by ensuring that as many people as possible can afford their medicines, the U.S. government is doubling down on harmful pharma-backed policies that will only worsen this crisis.”
The President’s executive order is based on twin false premises: that higher prices abroad will lower prices in the United States; and that the current system of rewarding pharmaceutical corporations with high prices and long-term monopolies has promoted urgently needed, patient-focused innovation. The pharmaceutical industry has long advanced these myths to advocate extending intellectual property rules that limit competition and raise prices, said MSF.
In fact, the Trans-Pacific Partnership, a trade deal President Trump adamantly opposed and which MSF called the most dangerous trade deal ever for health, contained many of the same pro-pharma provisions he is now unilaterally advancing through the proposed executive order.
The order directs the United States trade representative to review trade agreements to ensure that they “promote greater intellectual property protection and competition in the global market.” Additionally, the draft shows that the Trump Administration plans to review trade agreements and enforcement mechanisms that the United States could use to limit competition in other countries. The goal of the order is to lengthen drug monopolies in foreign countries to “ensure that American citizens do not disproportionately subsidize medical product innovation for the rest of the world, or allow foreign governments to unfairly devalue American innovation.”
“The idea that high drug prices in America can be reduced by increasing prices in other countries is cruel and not based in fact,” said Cone. “The reality is that pharmaceutical companies charge high prices for drugs everywhere in the world simply because they can, and raising drug prices abroad will do nothing for Americans while hurting people who rely on these medicines. Defending the current system of medical R&D is foolish. When doctors are empty-handed to respond to Zika, and when hepatitis C medicines are being rationed to the sickest patients because of their exorbitant price, can we really say that this current system ensures patients have the medicines they need?”
The truth is that high prices are stifling access to medicines, not promoting innovation for public health priorities and causing deadly consequences everywhere. For example, the price to vaccinate a child in the world’s poorest countries increased 68-fold in little more than a decade. New, high-priced vaccines, such as one for pneumococcal disease, which kills roughly one million children each year, are unaffordable in many parts of the world.
Additionally, the executive order will do nothing to promote the urgently-needed development of new antibiotics, amidst an alarming global increase in antibiotic resistance.
“At MSF, we often treat people resistant to the antibiotics that are currently available, and so we’re forced to make tough decisions,” said Dr Carrie Teicher, a doctor and epidemiologist with MSF. “How do you tell a mother with drug-resistant tuberculosis, or child in Haiti who was burned in a house fire, or a war-wounded father in Jordan that we’ve run out of antibiotic options because pharmaceutical corporations have chosen not to develop new lines of lifesaving antibiotics because of limited potential profits? And this isn’t unique to the places MSF works; the growing prevalence of drug-resistant infections is a recognized global concern—people in the U.S. are running out of options as well.”
Pharmaceutical companies often claim they need to charge high prices to compensate for the risks and investments they undertake when developing drugs. However, a significant amount of R&D is funded by taxpayer money. In many cases, people are therefore effectively paying twice: through their tax dollars and at the pharmacy, where they encounter high drug prices. At least 30 percent of the more than $200 billion invested annually in health R&D is funded by government grants, and governments usually provide companies additional subsidies, incentives, and tax credits without demanding guarantees that finished products will help the very people who funded the R&D.
In the case of Zika, for example, the Department of Defense has developed a vaccine candidate and is set to provide the pharmaceutical company Sanofi with an exclusive development license. The license includes no guarantees from Sanofi that a final product will be affordable or even available in the United States or anywhere else in the world, where newer and affordable medicines and vaccines are urgently needed.