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Trump pledges to work with Big Pharma to lower drug prices
Jan 31, 2017 | CNN
By Elizabeth Landers
President Donald Trump issued a message Tuesday to pharmaceutical company executives akin to one he delivered to auto executives last week: bring your production back to the United States and the Trump administration will lower regulations for you. -
Trump’s Criticism of Imports Adds to Drugmakers’ Headaches
Jan 31, 2017 | Wall Street Journal
By Peter Loftus and Preetika Rana
The U.S. pharmaceutical industry has been under pressure over high and rising drug prices. Now it’s feeling the heat for where it makes its products, too. “I want you to manufacture in the United States,” President Donald Trump told several pharmaceutical CEOs at a White House meeting Tuesday. He said he planned to reduce regulations and taxes to encourage more domestic drug manufacturing. Mr. Trump also told the CEOs that drug pricing has been “astronomical” and “we have to get prices down.”
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Trump pledges to work with Big Pharma to lower drug prices
Jan 31, 2017 | CNN
By Elizabeth Landers
President Donald Trump issued a message Tuesday to pharmaceutical company executives akin to one he delivered to auto executives last week: bring your production back to the United States and the Trump administration will lower regulations for you.
In a "pharma" meeting in the Oval Office, the President told executives from companies such as Merck & Co. and Johnson & Johnson that they have done a "terrific job over the years" but that prices for drugs must come down.
"So you have to get your companies back here. We have to make products ... We have to get rid of a tremendous number of regulations," Trump said. "I know you have some problems where you cannot even think about opening up new plants. You can't get approval for the plant and then you can't get approval to make the drugs."
"We have no choice," the President added, sitting at a table surrounded by aides, Vice President Mike Pence and eight pharmaceutical executives. "For Medicare, for Medicaid, we have to get prices way down, so that's what we're going to be talking about. We're also going to be streamlining the process so that from your standpoint so that when you have a drug you can actually get it approved -- if it works -- instead of waiting for many, many years."
Reading from a statement for a portion of the meeting, which was partially closed to the press, the President stressed that drug pricing has been astronomical in the United States -- a talking point that crosses party lines with support from progressive senators such as Bernie Sanders -- and that he wants to accelerate cures and accelerate US Food and Drug Administration drug approvals.
The President said that he's been "disturbed" to see terminally ill patients who need a drug that the FDA has yet to approve.
Much like his stance on taxing foreign-made cars, Trump said that there will be a trade policy that will "prioritize that foreign countries pay their fair share for US manufactured drugs so our drug companies have greater financial resources to accelerate development of new cures."
Reiterating a favorite line of his, Trump said: "It's very unfair what other countries are doing to us," pointing to devaluation.
"Look at what China is doing. You look at what Japan has done over the years. They play the money market, they play the devaluation market and we sit there like a bunch of dummies," he said.
The President said he plans to announce someone "fantastic" to the FDA soon.
Robert Bradway, chairman and CEO of Amgen, said that he shared a desire to eliminate and eradicate disease, noting the company is adding 1,600 jobs.
The CEO of Eli Lilly, based in Pence's home state of Indiana, said to the President that "some the policies you've come out and suggested could help us do more ... and tax deregulation, is a thing that could really help us expand."
Merck & Co CEO Kenneth Frazier spoke with reporters by the West Wing of the White House after the meeting concluded.
"The President is very much focused on how we can actually do better for patients, giving them more choice, helping them to deal with the medical bills that they have in a way that also stimulates innovation," he said.
When asked if he's more hopeful for this administration than he was of the last, Frazier said: "I think there is a real opportunity if we actually work on all those things.
Sanders and Rep. Elijah Cummings, D-Maryland, issued a joint statement shortly after the meeting saying they hope Trump "really" takes on the pharmaceutical industry.
The pair said they will introduced measures to lower prescription drug prices, a cornerstone of Sanders' presidential campaign. Part of the proposal would allow Medicare to negotiate with drugmakers for lower prices, according to the news release.
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Trump’s Criticism of Imports Adds to Drugmakers’ Headaches
Jan 31, 2017 | Wall Street Journal
By Peter Loftus and Preetika Rana
The U.S. pharmaceutical industry has been under pressure over high and rising drug prices. Now it’s feeling the heat for where it makes its products, too.
“I want you to manufacture in the United States,” President Donald Trump told several pharmaceutical CEOs at a White House meeting Tuesday. He said he planned to reduce regulations and taxes to encourage more domestic drug manufacturing. Mr. Trump also told the CEOs that drug pricing has been “astronomical” and “we have to get prices down.”
Mr. Trump’s latest call to bring drug manufacturing back to the U.S. echoed comments he made the week before his inauguration: “We have to get our drug industry coming back,” he said in a press conference. “They supply our drugs, but they don’t make them here, to a large extent.”
A majority, roughly 60%, of finished medicines sold in the U.S. are made in the country, according to the Food and Drug Administration. But imports have more than doubled in recent years. The U.S. is now the world’s biggest importer of pharmaceuticals, according to the Department of Commerce, with imports of $86 billion in 2015, compared with $39 billion in 2005.
The president last week appointed two pharmaceutical chief executives—Ken Frazier of Merck & Co. and Alex Gorsky of Johnson & Johnson—to a 28-member advisory council tasked with expanding manufacturing in the U.S.
Mr. Trump has also said he supports a “very major” border tax on companies moving operations overseas. And Republicans in Congress have proposed legislation that would effectively increase taxes on imported goods while favoring exports.
Since the 1980s, U.S. drugmakers have built up considerable manufacturing capacity in countries such as Ireland, India, Singapore and China to capitalize on tax and labor-cost advantages—while closing many domestic plants.
The FDA also has estimated that 80% of active pharmaceutical ingredients—the main components used to make drugs—are now made outside the country. Antibiotics sold in the U.S. are made almost entirely from ingredients sourced from China and India, for example.
It isn’t just U.S. pharmaceutical firms that import products; European and Asian companies supply drugs and ingredients to the U.S., too.
In an emailed statement, the trade group Pharmaceutical Research and Manufacturers of America, or PhRMA, noted that drug companies, both U.S. and foreign, “invest more than $70 billion a year in research and development in the United States—more than any other industry in America—and are responsible for 4.5 million American jobs.” It said the industry is “committed to working with the president and administration to improve American competitiveness and protect American jobs.”
Amgen Inc. CEO Robert Bradway told Mr. Trump at Tuesday’s meeting that the company planned to add 1,600 jobs in the U.S. this year.
Pfizer Inc. CEO Ian Read voiced support for President Trump’s calls to add drug manufacturing in the U.S., saying a corporate-tax overhaul would pave the way for Pfizer to add U.S. manufacturing jobs.
Before Tuesday’s meeting, Merck said CEO Mr. Frazier “appreciates the opportunity for Merck to provide its input as policies are developed that are critical to the innovative biopharmaceutical industry and the global competitiveness of America’s manufacturing sector.”
A J&J spokesman said the company will work with the administration “to find solutions to grow the domestic economy.”
The Trump administration hasn’t spelled out how it might draw drug manufacturing back to the U.S. And any efforts to do so could undermine another one of Mr. Trump’s stated objectives: reducing drug prices.
“I think this is something the industry needs to pay attention to, in light of its potential impact on the cost of manufacturing,” said John Taylor, a former FDA official and pharmaceutical executive who now advises the industry on compliance and regulatory affairs with Greenleaf Health Inc.
Any crackdown on overseas manufacturing of pharmaceuticals would “cause great disruption to the health-care system in the U.S. and directly drive up costs,” said Jeff Weisel, who has worked in Asia for drug companies and is now a director at Ernst & Young LLP’s health-care practice in Singapore.
The auto industry is already dealing with disruption at the hands of the new administration. Under withering attacks from Mr. Trump, car makers are rethinking plans to produce cars abroad, particularly in Mexico, for sale in the U.S.
Several U.S. drugmakers are in the process of building plants overseas or have recently done so. Not all of it is for U.S.-bound products; some of the new manufacturing capacity is meeting rising demand in other countries.
AbbVie Inc., of North Chicago, Ill., finished work on one plant in Singapore in September to make certain drug ingredients, and is building another plant on the same site to make components for biotechnology drugs including its top seller, arthritis treatment Humira. The combined cost of the projects is $320 million.
An AbbVie spokeswoman said the plants—which haven’t begun supplying products to the market—will meet growing global demand for products, adding that the company has a “balanced network” of plants in the U.S. and abroad.
New York-based Pfizer said in June it will spend $350 million to build a plant in Hangzhou, China, to make copycat versions of biotech drugs, with construction expected to be completed next year. The plant’s initial focus will be to supply the Chinese market but Pfizer said it could eventually be a global supplier.
Pfizer said it has 49 manufacturing plants abroad, but noted that the majority of its manufacturing workers are in the U.S., where it has 14 plants in 11 states. Last year, the company began building a new one in Andover, Mass. The plant will be used in part for biotech products, a rapidly emerging segment of the industry concentrated in the U.S. and Europe.
In 2007, Pfizer said it planned to outsource as much as 30% of its manufacturing volume, much of it to Asia, by 2010. A company spokeswoman declined to say how much it currently outsources to Asia.
American drugmakers have also acquired facilities in Asia, where manufacturing costs can be 80% lower than in the U.S. For example, in 2007, generic-drugs maker Mylan NV acquired India’s Matrix Laboratories Ltd., transforming itself into one of the world’s biggest makers of active pharmaceutical ingredients.
Half of Mylan’s workforce is now based in India, as are 25 out of its 40 manufacturing facilities. All the active ingredients Mylan supplies to drug companies around the world are made in India.
In an emailed statement, a Mylan spokeswoman didn’t offer comment on overseas manufacturing, rather noting that “on the finished-dose side we manufacture in the U.S. about 80% of what we sell in the U.S.”
Most major drug companies do continue to operate plants and open new ones in the U.S. PhRMA estimates there are more than 100 domestic drug-manufacturing plants. Michael Kamarck, a former industry executive who consults for drugmakers, said skilled workforces and local tax incentives continue to draw investments in U.S. plants.
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