One of President Trump's keynote agenda items was bringing pharmaceutical prices down for American consumers, and that seems to be happening; there have been some deals made between the administration and the various pharma giants, and the initial indicators are that those deals seem to be working.
At least, the pharmaceutical companies themselves don't seem to be suffering from them.
Big drug companies' pricing deals with the Trump administration barely came up during their most recent round of quarterly earnings calls, in yet another sign that the agreements were mutually beneficial for both parties.
Why it matters: The Trump administration wants to tout lower drug prices on the campaign trail, but it's still unclear how much patients will ultimately benefit.
The big picture: Although details of the deals involving more than a dozen leading drug companies are confidential, the industry has made concessions on some prices in exchange for more regulatory certainty — with little to no noticeable impact on the bottom line.
- "If you have engaged in something that materially changed your outlook, you have to communicate that," said Rob Smith, managing partner at Capital Alpha. "The fact that they're not saying much kind of tells you what you need to know."
- Centers for Medicare and Medicaid Services administrator Mehmet Oz at a PhRMA event earlier this week suggested the pricing deals were accommodating to manufacturers.
- "I don't want to hurt innovation," he said. He noted that much of the price adjustments were for Medicaid, where "prices are lower anyway, so it's less hurtful; the sector did OK, we believe."
That's all to the good. This is, after all, another pocketbook issue, especially for the seniors among us (I'm sliding into that category myself) for whom pharmaceutical prices are a serious concern - and who vote in higher percentages than almost any other demographic.
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And if the major companies are not finding these deals to be enough of a concern to be bringing them up in quarterly earnings calls, that's a pretty good indicator that, at least so far, they are doing well enough with the deals they've made.
This is a world I've traveled in myself, although I was more in devices and biotech than pharmaceuticals - there is some overlap in areas like combination products. A new drug can cost a company billions in development costs before the first dose goes to market, and the company has to recoup that cost sooner or later; otherwise, there will be no more new pharmaceuticals. And I can name for you at least one person whose physical condition, including a serious heart/lung condition, has improved markedly thanks to a new drug product that was only released for use within the past year. I happen to be married to her.
There are more deals in the works, including having Congress provide most-favored-nation pricing for American consumers. It's not yet clear how that's going to work; proposals are still being kicked about. But the initial round of deals, for Medicare and Medicaid recipients, seems to be acceptable to all parties. We can call that a win.
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