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Not only cars and steel, but also drugs are a thorn in the way of Trump. The drugs are very expensive in the United States and the president wants to lower costs in a very “simple” way.
Medications in the United States are more expensive than in other industrialized countries. According to the Commonwealth Foundation, a private organization dedicated to the issue of health, every American citizen spends around a thousand dollars per year on medicines. In contrast, the Germans spend a little less than $ 700 and the Swedes do not spend $ 400. Studies suggest that this is not because more drugs are prescribed in the United States; simply, Americans pay higher prices, and mostly from their own pockets.
A comparison of the Bloomberg data service shows that prices in the US Sometimes they are much higher than what is charged in other industrialized countries. For example, in the United States a drug for rheumatoid arthritis costs around $ 2,500 a month, while in Germany, the same drug costs about $ 1,750. The Financial Times found an even more noticeable difference: a pain medication that in Europe costs $ 21 for 60 pills, in the United States it sells for $ 2979.
Europe is to blame
But what is the reason? President Trump’s explanation is very simple: the other countries are to blame. Pharmaceutical companies feel compelled to recover the high costs of research and development in the US market. In other industrialized countries this is not possible because there is price control. Europe and other rich nations benefit at low cost from these innovations.
But is this really so? One of the reasons for the high prices in the USA. is that companies take advantage of US patent laws. They launch new products on the market that are very similar to the previous ones, but, in this way, they prolong the patents and avoid the development of cheaper generics.
In other countries this does not happen. In France or Great Britain there is a price limit. In addition, pharmaceutical companies in other industrialized countries must demonstrate that their product is more effective than the one that already exists. However, in the United States, the efficacy test of the FDA (Food and Drug Administration) and doctors prescribing the medication suffices.
The industry maintains that the increase in drug prices is due to the high costs of research and development. But no one knows how high those costs are exactly. The companies keep this data secret.
A study by the Tufts Center in Boston suggests that the cost to develop a new drug is $ 2.7 billion. Another study, based on the analysis of the mandatory records in the SEC (the Securities and Exchange Commission) estimates that the cost is 757 million dollars.
“Socialist” price controls
So, what should be done? On this occasion, Trump also has a very simple solution: patients from countries like Germany should pay their “share.” Trump said this during a speech in May explaining how he would lower drug costs in the United States. “It’s time to put an end to global exploitation once and for all.”
Trump wants to present this requirement in the negotiations of trade agreements and customs duties. Alex Azar, a former director of a pharmaceutical company and now Health Minister of the United States, believes that US business partners have to pay more because they put “socialist price controls and market barriers” to maintain “unfair prices.”
However, politicians do not explain how this can lower costs for US citizens. That pharmaceutical companies generate more income abroad does not mean that they will lower costs in the United States. Trump did not present any plan of how he will negotiate with the pharmaceutical industry, he only promised the “harshest action of a president.” After these words, the actions of the pharmaceutical companies increased significantly.