Trump announces new deal with pharma companies to cut drug prices

United States President Donald Trump announced new agreements aimed at lowering prescription drug prices.

On Friday, alongside leaders from Bristol Myers Squibb, Gilead Sciences, and Merck, among other leading pharma giants, the president announced deals that would cut prices on their medications to match that of the developed nation with the lowest price.

“Starting next year, American drug prices will come down fast and furious and will soon be some of the lowest in the developed world,” Trump said.

“This is the biggest thing having to do with drugs in the history of the purchase of drugs.”

Under the deals, each drugmaker will cut prices on some of the drugs sold to the Medicaid programme for low-income people, senior administration officials said, promising “massive savings” on widely used medicines without giving specific figures.

“We were subsidising the entire world. We’re not doing it anymore,” Trump said at a White House news conference, flanked by nine pharma executives.

Mehmet Oz, the director of the Centres for Medicare and Medicaid Service, said Regeneron, Johnson & Johnson, and AbbVie would visit the White House after the holidays for the launch of the government’s TrumpRx website.

US patients currently pay by far the most for prescription medicines, often nearly three times more than in other developed nations, and Trump has been pressuring drugmakers to lower their prices to what patients pay elsewhere.

The details of each deal were not immediately available, but officials said they included agreements to cut cash-pay direct-to-consumer prices of select drugs sold potentially through the TrumpRx.gov website, to launch drugs in the US at prices equal to – not lower than – those in other wealthy nations and to increase manufacturing. In return, companies can receive a three-year exemption from any tariffs.

Drug prices fall

Merck said it will sell its diabetes drugs Januvia, Janumet and Janumet XR – set to face generic competition next year – directly to US consumers at about 70 percent off list prices. If approved, its experimental cholesterol drug enlicitide will also be offered through direct-to-consumer channels.

Enlicitide is one of two Merck drugs expected to receive a speedy review under the FDA’s new, fast-track pathway, the Reuters news agency has previously reported.

Amgen said it will expand its direct-to-patient programme to include migraine drug Aimovig and rheumatoid arthritis medicine Amjevita, offering both at $299 a month – nearly 60 percent and 80 percent below current US list prices.

In July, Trump sent letters to leaders of 17 major pharmaceutical companies, outlining how they should provide so-called most-favoured -nation prices to the US government’s Medicaid health programme for low-income people, and guarantee that new drugs will not be launched at prices above those in other high-income countries.

So far, five companies have struck deals with the administration to rein in prices. They are Pfizer, Eli Lilly, AstraZeneca, Novo Nordisk and EMD Serono, the US division of Germany’s Merck.

A portion of revenues from each company’s foreign sales will also be remitted to the US to offset costs, officials said.

The companies pledged together to invest more than $150bn in the US for R&D and manufacturing, according to officials, although it was unclear whether that included earlier commitments. Several also agreed to donate drug ingredients to the US strategic reserve.

Trump has long focused on the disparity between drug prices in the US and other wealthy countries, which have government-run health systems that negotiate price discounts.

The spectre of tighter price controls by the US government initially spooked investors, but the terms of the deals announced so far have calmed many of those fears.

Analysts have noted that Medicaid, which accounts for only approximately 10 percent of US drug spending, already benefits from substantial price discounts, exceeding 80 percent in some cases.