Big pharma official to Congress: Force countries to pay more for drugs in new trade deals

By Health CareFOXBusiness

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A top official at the pharmaceutical industry’s main lobbying association on Tuesday said the U.S. should include provisions in new trade agreements to force foreign countries to pay more for prescription treatments.

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The discrepancy between what American consumers and patients in other countries pay for drugs is a key focus for President Trump.

The White House is weighing a proposal to tie the reimbursement for prescription treatments in the U.S. to international benchmark pricing, one the pharmaceutical industry bitterly opposes, partially because the sector is able to recoup costs lost elsewhere by charging more here.

Unlike other countries that employ a single-payer system, the federal government does not negotiate treatment prices, instead deferring to complex negotiations between insurers, middleman pharmacy benefit managers and the pharmaceutical firms to drive down costs.

In some instances, drug companies are required to sell a treatment for whatever a foreign government asks, according to James Stansel, general counsel at the Pharmaceutical Research and Manufacturers of America, the sector’s main lobbying association.

Individual companies, he argued, do not have the clout to force those countries to pay more and advocated for Congress and the White House to act.

“We should use our trade agreements to do that,” he told the Senate Judiciary Committee.


While the drug industry tries to realign focus away from costs in the U.S., opponents say the existing American health care system gives pharmaceutical firms to largely unfettered ability to hike prices.

"They’re making a whole lot more from us because we don’t stake steps to protect Americans," David Mitchell, founder of Patients for Affordable Drugs, told the panel.

Pharmaceutical executives previously told the Senate Finance Committee that the industry, by and large, still makes a profit on drugs sold in countries outside the U.S.

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Drug pricing-related measures are typically a hot-button issue in trade negotiations.

A provision in the new trade deal between Canada, Mexico and the U.S. to increase the time period that some advanced prescription treatments can be offered exclusively in those countries, without generic competition, is driving opposition among some House Democrats whose votes could be necessary for the Trump administration to win overall passage.


Disagreements over the exclusivity that some medications receive in China has also reportedly been a point of contention in negotiations with the U.S. over a new trade deal.