High prescription drug prices are one of the main components of the affordability problem that continues to afflict all but the most affluent Americans. Public officials are addressing the issue, but in two very different ways. One is a gimmick that will do little good; the other is a meaningful attack on pharmaceutical abuses.
On one side we have Trump’s approach, which is to create a web platform—named after himself, of course—that claims it will provide access to the lowest prices. TrumpRx, which at this point contains only a large photograph of its namesake in the Oval Office along with grandiose promises, is designed to inform consumers about special deals that will be available through purchases directly from drug manufacturers.
Like many of Trump’s initiatives, TrumpRx is characterized by misleading claims, conflicts of interest, and potential illegality. In many cases, the promised savings are illusory. The prices consumers pay when buying directly from the drug companies will be higher than what they would pay using insurance. Those without insurance may benefit, but the amount of the benefit is declining as the companies which signed up for TrumpRx have been raising their prices.
Concerns about a conflict of interest stem from the fact that the president’s son, Donald Trump Jr., sits on the board of BlinkRx, a company which is positioning itself to profit from TrumpRx by helping drug companies set up direct-to-consumer systems linked to the program.
And concerns about illegality are linked to the possibility that TrumpRx may run afoul of the Anti-Kickback Statute by steering patients to higher-cost medications that they may end up receiving through Medicare and Medicaid.
Compare this mess to the recent announcement that attorneys general from 48 states and territories had reached a settlement with Bausch Health and Lannett Company to resolve allegations they conspired “to artificially inflate and manipulate prices, reduce competition, and unreasonably restrain trade with regard to numerous generic prescription drugs.” The firms agreed to pay nearly $18 million and consented to a set of reforms designed to promote fair competition.
At the same time, 42 states and territories filed a new lawsuit against drug giant Novartis and its subsidiary Sandoz, accusing them of fixing prices, allocating markets, and rigging bids for 31 different generic drugs.
These are just the latest developments in a long-running legal battle against anti-competitive practices in the generic drug industry, which was once seen as a force that would drive down prices. Instead, many generic producers allowed themselves to be corrupted by entering into deals with brand-name manufacturers under which they were paid to delay introduction of low-cost substitutes. Pay for delay legal actions brought by federal agencies, state AGs, and private plaintiffs in class action lawsuits have yielded billions of dollars in settlements.
These cases have not yet made drug manufacturers paragons of competitive virtue, but they put continuing pressures on companies to end their abuses. That’s a lot more than what we can expect from TrumpRx and its dubious agreements with Big Pharma.
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