President Trump Signed an executive order Monday will try to lower the cost of certain drugs in the United States - but why are the prices of drugs so high in the beginning?
According to a report published by Rand, a nonprofit research organization, Americans pay three times as much for prescription drugs as people in other high-income countries such as the UK, Germany or France. For some drugs, the cost difference is even steeper. Rand found that, for example, a month of insulin costs about $100 in the United States, while France only costs about $10.
To a large extent, it depends on price negotiations.
Céline News Medical contributor and general public health writer Dr. Céline Gounderer, PhD, Céline Gounderer, general public health writer, Dr. Céline Gounderer, general public health writer for KFF Health News, contrasts us with the governments with all payments in a country that contrasts our government with our government. “So when you have a player who negotiates on behalf of the entire population, you only have more negotiating capabilities.”
In the U.S., the closest comparison is probably Medicare, a federal health insurance plan for people over 65, but that doesn't cover all Americans, Gond said. In addition, the capacity of health insurance Negotiate drug prices Gold said it wasn't until 2022 when President Joe Biden signed the Inflation Lower Act in 2022, which allowed negotiations on a small portion of all prescription drugs.
Because there is no universal health care in the United States, “we don’t have a negotiator to come to drug prices.”
Most Americans have private health insurance, and the price they pay for prescriptions is negotiated through a pharmacy benefit manager or a PBM.
In theory, PBMS should negotiate manufacturer discounts and other cost-effective options to help control drug prices, a nonprofit foundation that advocates health equity.
“But economic incentives for PBM could lead to higher drug prices, higher out-of-pocket costs for patients and closure of independent pharmacies in rural areas and low-income communities,” the group noted on its website.
Last year, the Federal Trade Commission Calling the pharmacy welfare manager - Often described as a prescription drug middleman - thus swelling drug prices. In a report released in July 2024, the FTC said that PBM has immense control over the availability and cost of drugs.
The Federal Trade Commission said in a recent January report that the three major PBM costs multiple lifesaving drugs, including drugs for treating heart disease and cancer. The FTC found that some prices are marked hundreds, sometimes thousands, of percent.
Not sure if Mr. Trump’s executive order can make progress on drug prices or even affect what drugs will be affected.
Gounder noted that his efforts during his first presidency were similar, which only applies to medications provided by hospitals and clinics in Medicare Part B, but failed.
"The last time he raised this in 2020, it was a competition in federal court and didn't lift it up," Gold said.
She said Congress needs to take action to truly change the way US negotiates in the United States.
Plus, “Pharmaceuticals are one of the biggest lobbying events in Washington, D.C., and of course, they object to that.”
The pharmaceutical industry believes that lower prices will affect the innovation and development of new drugs.
"Using outdated methods from other countries to value and pay for valuation of drugs will stall investments across the U.S. biotech companies, risking access to important treatments for millions of U.S. patients and leading to less work in the U.S.," John F. Crowley, president of the Advocate Group Biotech Innovation Organization, said in a statement Monday.
Gond said changing the impact of pharmaceutical companies on pharmaceutical companies will also require congressional in the form of campaign financial reforms.
Patients with the now affordable medications from the National Patient Advocacy Group said in a statement that several aspects of Mr. Trump’s orders have caused problems.
"The executive order is a step in the right direction, but without other guardrails, it provides pharmaceutical companies with room to continue playing at the expense of patients," the statement said. "The reality is: pharmaceutical companies set high prices in the United States because U.S. policy allows them - unlike other countries with lower prices in higher-income countries."