phrma

The Liberal Media Cowers as Trump Stands Up to Big PhRMA


On Friday afternoon President Trump announced the signing of 4 executive orders intended to bring down prescription drug costs meaningfully for American patients. “We’ve been waiting for Congress to take action for many decades to reduce drug prices for more than just a small handful of people,” said the president, accurately. “I’m unwilling to wait any longer.”

Americans can now legally buy low-cost prescription drugs from Canada and other countries, as many American seniors and others have had to do illegally, and potentially unsafely, for decades. Vouchers will be made available to individuals to bypass the federal restriction, “provided such importation poses no risk to public safety,” and thus drug costs will go down and waiver oversight will protect patients from unsafe medication — and provide guidance independent of the powerful pharmaceutical lobby.

A second order ensures that drug rebates, and specifically those in the Medicare Part D program, are directed to the patients instead of middlemen: “They make more money perhaps than even the drug companies themselves,” says President Trump, “and they don’t do much. Maybe they don’t do anything. Nobody even knows who they are, but the middlemen are making a fortune, and Pharmacy Benefit Managers and people are just bilking Medicare patients with these high drug prices while they pocket gigantic discounts. The amount of money they’ve made over the decades is too incredible even to speculate or say. It’s massive.” The rebates will be reclassified as kickbacks, making them illegal.

Comparably (but not in scale), a third order makes insulin and injectable epinephrine available to over two million low-income patients essentially at no cost, by ordering Federally Qualified Health Centers to pass the 340B discounts they receive on to their patients. Prior to this executive order, the average low-income patient was charged $500 or more for two vials of insulin every month, which the . In effect the federal government was buying insulin and epinephrine for these FQHC’s by discounting each unit to one penny and allowing them to resell the discounted drugs at full price, marking them up tens of thousands of times to patients who can’t afford it but need the medications to live. What other drugs does this happen with?

To lower costs for diabetes patients who don’t receive federal assistance, President Trump has authorized the re-importation of insulin at the prices other countries pay, upon procedure and approval from HHS Secretary Alex Azar. “No president has ever taken action on drug prices as bold as any of today’s individual actions,” says Azar. “Today’s executive orders will deliver billions of dollars in discounts directly to patients at the pharmacy counter.”

The fourth and most important executive order is conditional on drug makers reaching agreement with the Trump Administration “to substantially reduce drug prices” by August 24. If they don’t, Medicare will be required to purchase Part B drugs at “Most Favored Nation” pricing, meaning the lowest price of a set index of developed countries. Immediately, industry executives set a meeting date for Tuesday—which they later canceled.

In practice, a “Most Favored Nation” deal should bring prices together as the US would pay less and EU countries would have to pay more. All or most of these countries have at least partially-socialized healthcare systems that cap the price of medicines. They can’t cap it too low or the drug maker will decline to sell its drug there, so the country and manufacturer negotiate a price (a much, much lower one than ours).

The US has not and does not do any negotiation for Medicare Part B drugs (drugs a doctor administers to Medicare-covered seniors during visits). Instead, the drug maker sets a price and once it gets FDA approval, Medicare is required to pay it and the doctor receives a six percent commission for every Part B drug he/she prescribes: “ASP plus 6” pricing (Average Selling Price plus six percent).

Therefore, drug makers know that if they make an intravenous drug, which has to be administered by a doctor, and it is intended primarily for Medicare patients, they can name their own price — and perversely, the higher the price, the more incentive a doctor will have to prescribe it. In Secretary Azar’s words, it’s “Hey, manufacturer, invent whatever list price you want, and we’ll pay a 6 percent premium on top of that.” Inevitably this price is high — Europeans pay less for the same drugs, from the same makers, even as the US buys more medicine than any of them, by far, shouldering most or even all of the burden for research and development. Trump correctly terms this “global freeloading.”

This is not free market economics, where the highest-volume purchaser, naturally, negotiates the lowest price — it’s the opposite. But Big Pharma is already threatening to fund a disinformation campaign targeting the president’s reelection campaign in battleground states. They will boldly imply that setting their own prices and corrupting the medical practice with their 6% commission system is Free Market Capitalism. Preventing consumers from accessing lower prices in neighboring countries? Also Free Market Capitalism. And ending this system where the US funds the research and development of all the world’s drugs will be characterized unironically as “Socialism.”

The en vogue Socialist position, Medicare For All, doesn’t have any interest in these kind of changes: they would take Medicare’s ridiculous cost structure and make it universal. ASP plus 6 pricing would set the cost for every in-visit drug and Part D rebates would be expanded across the industry. It sounds like a good idea if you have no idea how Medicare is priced, and I can’t think of a more direct road to runaway inflation. Trump’s new orders move us firmly in the opposite direction: solvency.

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The Press:

Predictably, the press is downplaying these executive orders. In only the second sentence of their report, Reuters notes that “Trump has previously proposed most of the changes, but this is the first time they have made it into signed executive orders.” Via the Chicago Tribune, the Associated Press makes the similarly-dismissive but more overt argument that “Trump cast his directives as far-reaching, but they mostly update earlier administration ideas that have not gone into effect.” These directives can’t be far-reaching if he already talked about them, they say through forked tongues.

President Trump would call this fake news and he’d be right, because it isn’t true. How is it that this sort of sophistry consistently makes it past the editors at every mainstream liberal newspaper? They are either incompetent or dishonest, and the uniformity of their mistakes suggests collaboration. Reuters and the AP, of course, are not liberal newspapers but news wire agencies that supply every newspaper. They claim to be value-neutral but they slyly editorialized both of those press releases.

In a Tuesday press conference, Pfizer CEO Albert Bourla says the executive orders will cause “enormous destruction,” “distraction” or “disruption” to the industry (a native Greek, Bourla pronounced it unclearly). I guess he hasn’t read the Chicago Tribune. Or Politico. Or the Washington Post, or any of the myriad of liberal newspapers that regularly seem to duplicate one other’s findings. President Trump’s order is insignificant, he already talked about it and it’s not going to happen, so how could it distract or disrupt? Mr. Bourla just needs to read a newspaper, or maybe a magazine if that’s more his speed.

He could start with Forbes. They published a fabulous article on this topic by staff writer Avik Roy; but it’s Contributor (“guest writer”) Joshua Cohen’s, not Roy’s, that is indexed atop the search engines, describing the executive orders as “contain[ing] caveats and limitations.” Like the writers above, Cohen is keen to note that “this was already on tap” and doubts Azar’s ability to stop the rebates without increasing rates (as stipulated in the order), or to effect Canadian drug importations without posing additional risk to public safety, an old claim and perhaps old trick of the pharmaceutical industry. In conclusion Cohen writes, erroneously, that the orders are not immediately-enforcable and are likely to meet court challenges.

Mr. Cohen describes himself on Forbes’ site as “an independent healthcare analyst with over 22 years of experience … From 1999 to 2017 I was a research associate professor at the Tufts Center for the Study of Drug Development.” In the financial disclosure section of their website, the Tufts Center describe itself, like Cohen, as independent, before noting that they receive “unrestricted grants from pharmaceutical and biotechnology firms [and from “research-based industry”]. These grants represent approximately 25% of Tufts CSDD’s operating expenses.”

I think it’s safe to assume Mr. Cohen’s pay and benefits were among those operating expenses, but even if they weren’t, his longtime employer relies on that grant money. How can either of them be described as an independent and why would Forbes submit to printing that? Assuming the relationship above is not new, Cohen spent nearly all of his career on the industry payroll.

A favored argument against the seriousness of these executive orders goes that Trump is signing them now to boost what the New York Times call “his faltering re-election campaign,” based on polls (and newspapers) that completely discredited themselves last election cycle. In 2016 the only thing they disagreed over was how badly Trump would lose, and the New York Times still thinks we should take their predictions with a straight face.

While it’s doubtlessly true that the coming election is a motivation for Trump, it’s fake news to imply that this makes him somehow disingenuous, or that it must be the sole reason he is doing this. The “Democracy Dies in Darkness” Washington Post saw fit to print Margarid Jorge, of the misleadingly-titled propaganda (and possible dirty money) outlet, “Lower Drug Prices Now,” claiming that “These Executive Orders are not about policy, they’re about politics. The only reason for President Trump’s rekindled interest in lowering drug prices is his dwindling poll numbers, and realization that our country’s senior citizens are abandoning him.”

These seniors are not upset about their neighborhoods being trashed and set on fire, nor with the pattern of Democrat governors quarantining Covid patients in nursing homes, which lead predictably to the widespread death of seniors in nursing homes. They don’t mind reading the F word all over their favorite statues, seeing their local stores boarded up or being unable to pick up their prescription because Biden voters looted their pharmacy. No, mass media liberals have a psychic ability that enables them to see inside Trump’s head and everyone else’s: they are so in tune with what we want, they know it better than we do.

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New Legal Precedent:

President Trump’s rationale for the timing of these orders is a matter of public record: “The DACA [Supreme Court] decision allowed me to do things that some people thought the president didn’t have the right to do. I was given that right. Drug prices will be coming down very, very substantially.” In other words, a month after the DACA ruling set a new precedent, he did it because he could.

The ruling established that a president can make executive orders that go against federal or other laws, as former President Barrack Obama did with DACA, and if he follows the proper procedures, these orders cannot be temporarily or otherwise halted until they’ve been fully litigated.

The DACA Directive ordered that a wide group of immigrants be exempted from federal immigration law, thereby going against established immigration law. In Chief Justice John Roberts’ words, “We do not decide whether DACA or its rescission are sound policies. We address only whether the agency complied with the procedural requirement that it provide a reasoned explanation for its action.”

Because the proper procedures were followed and the agency gave sufficient explanation for its actions, the Court ruled the DACA Directive must stand until the litigation runs its course, and cannot be struck down even if it is plainly illegal. Likewise, President Trump’s new orders if enacted properly under the defined procedures cannot be prematurely halted by court orders. No “temporary injunctions” shall be issued that the Supreme Court won’t be obligated by precedent to nullify.

This is clearly the reason President Trump signed these executive orders now and not two years ago. Had he signed them before the DACA ruling, they would have been struck down promptly, pending litigation. Now they will be instead held up pending litigation, and just as the Trump Administration argued that DACA was against the law, Trump’s “progressive” opponents will surely argue that these orders are against the law: federal law prohibits the importation and re-importation of low cost drugs from foreign countries, and mandates that Medicare must pay drug manufacturers’ prices upon FDA approval. And that’s fine, they will be told, but as Chief Justice Roberts established, their objections will have to be litigated and in the meantime, the orders will stand.

The fake news Los Angeles Times describes this in a widely syndicated editorial written by one of their editors as “The weird and disturbing rationale for Trump’s prescription drug price controls.” Only a month ago, this same newspaper celebrated the DACA ruling, titling their piece “The Supreme Court’s DACA decision shows we still have an independent judiciary” and gloating right beneath the title that “Chief Justice John G. Roberts Jr. ruled against the Trump administration in a landmark case for human rights.”

They had no problem with Chief Justice Roberts’ reasoning then, which they subtly mischaracterized when they wrote that rescinding DACA “violated federal law” — Roberts said, rather, that the proper procedure must be followed to rescind executive orders, and must also followed to write them; and when it has been followed in the writing, it cannot be reversed before the legal process has been seen through to completion. Now that President Trump is using this ruling on procedure to his (and the American public’s) advantage, the Times suddenly wants to change it.

The bottom line is that employees like Mr. Cohen, the L.A. Times and the Chicago Tribune’s AP writer (see first page) are plain wrong when they claim the orders’ enforcement is subject to further court rulings—the Court of all courts has ruled, and by this ruling Trump’s executive orders are enforceable from the moment HHS secretary Azar outlines the procedures and explains everything; after which a Ninth Circuit judge or any other will have to complete the full litigation process to stop it, which will take years (as it has with DACA: three and counting) of back-and-forth, deeply unpopular lawsuits aimed at making insurance expensive again. I’ll venture to guess these lawsuits will receive considerably less media attention than their DACA counterparts.

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Background:

In the same manner, Trump’s lifting of federal prohibitions against Canadian drug importation has received much less attention than Obama’s failed campaign promise to do so. Giving Americans access to Canadian drug prices has had popular support dating back at least to the 1990’s, when Congress and the Senate came together to pass it into law. With less than a month remaining in his second term, former President Bill Clinton bizarrely let (or had) his HHS secretary Donna Shalala cancel the program. Bernie Sanders, submissive even then, publicly supported the axing of the program.

20 years later Shalala, now a Florida congresswoman (and former president of the Clinton Foundation), is still obstructing drug importation. She joined Florida Democrats last year in their fight against the implementation of another lawmaker-approved drug importation bill, Florida’s HB 23 of 2019. “Good luck with that Canadian drug import bill,” she tells the state of Florida from her house.gov web page, citing the PhRMA lobby’s boilerplate “safety concerns” and suggesting Canada won’t allow it, since she says it will raise their costs.

Why in the world would Canada’s buying a higher volume lead to their costs rising? Do any lawmakers or public figures genuinely believe this garbage? There is an obvious connection between pharmaceutical interests and the “safety” concerns of importing drugs from Canada that are fully-regulated and perfectly safe for Canadians—and excluding generics, these are in fact the same drugs, made in the same facilities by the same manufacturers. How did such a weak argument survive all this time? I can’t believe the policy makers ever bought into it, but it’s easy to imagine them playing along.

Former President George W. Bush axed at least 3 Senate-approved bills to allow drug imports (not counting the one Clinton ripped up, which remained on the table for him to rework), after indicating a willingness to approve it during each of his campaigns. Bush’s would-be party successor John McCain campaigned on drug importation, like his opponent Obama, and like Obama McCain gave legitimacy to the phony safety concerns, saying “drug safety will take precedence in determining this policy.”

“Drug safety” certainly took precedence for Mr. Obama, if by drug safety you mean industry profit. All Big Pharma had to do was send his advisor an email, and she replied without even consulting with him that the decision had already been made, “based on how constructive you guys have been, to oppose importation on the bill.” This was pure swamp politics.

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Going Forward:

Governor Ron DeSantis signed the Florida drug importation bill a year ago, pending federal approval and it appears he will receive it when Azar implements the order. I’d expect this to clear the road for other states to do the same, which in turn could cast the incoming lawsuits from Big Pharma in more clear light as a transparent attack on the American people.

The nature of the conflict is that the immensity of their profit comes at the expense of average Americans. The press can’t report fairly on this because like Big Pharma their owners have a vested interest in the outcome. And so they attack, and moralize, trivialize and force their talking points and agenda onto us at all hours of the day — isn’t this the story of the press since Trump took office?

Drug importation is a titanic victory for President Trump, even if they dropped it right in his lap with the DACA ruling — I can’t imagine other presidents taking this opportunity against such a powerful lobby. Presidents Clinton and Bush Jr. couldn’t stand up to PhRMA even with the House and Senate both in their corner. The notion of Bernie taking the ball and running with it makes me laugh a bitter laugh: he would not have done what Trump did last Friday and neither would Bill’s wife, but both of them ran on it, making promises they knew they’d never keep. This is what sets Trump apart from everyone who’s been allowed to contend for party nomination for the past 30 years, because he wasn’t allowed: he took the presidency by force, by telling the truth.

“We believe [President Trump’s executive orders] are likely geared more towards deriving campaign talking points rather than producing tangible, material effects,” Brian Abrahams, a biotech analyst at RBC Capital Markets, said in a note. He can’t possibly believe this and indeed, one should never assume a paid lobbyist, no matter how they describe their job, is being candid. Abrahams like the other media hacks is actually knocking Trump for fulfilling his campaign promises, under the assumption that perhaps no president, and certainly not President Trump, could mean what they say. The real problem their bosses have with Trump is that he *does* mean what he says — just not when he’s talking to them.