Posted on 05/12/2025 8:47:48 PM PDT by RandFan
@PeterSchiff
When Kamala Harris talked about price-fixing groceries, Republicans were correct to call her policy socialism. The same applies to Trump's desire to do something similar with prescription drugs. But as always, when government interferes with the free market, the plan will backfire, resulting in higher, not lower, prices for prescription drugs in the U.S.
Thanks to overly burdensome FDA regulations, it costs a lot of money to bring a prescription drug to market. As a result, pharmaceutical companies have a finite period of time to recover their costs and turn a profit before their patent expires, and other companies that spent no money developing the drug can knock it off.
Also, for every drug that gets approved, five don't. So not only do drug prices need to be high enough for companies to recover the costs of developing the drugs they sell, but to recover what they spent developing drugs they never sell.
The U.S. is the main market for prescription drug sales, so that is where pharmaceutical companies look to recover their costs first. They supplement that recovery with overseas sales. But since the marginal cost of those sales is very low, they maximize their profits by selling in foreign countries at lower prices.
This is especially true in poor countries that could never afford to pay what Americans can. Pharmaceutical companies still make money on those sales, even if the price is much lower than what Americans pay. But if they charged people living in poor countries the same prices as they charge Americans, the collapse in sales volume would result in lower profits.
Now some of the foreign sales are not to poor countries, but other rich countries. But there, U.S. companies compete with foreign pharmaceutical companies, that sell drugs that might not even be approved in the U.S., and that spent much less to develop their alternatives. To stay competitive and win contracts, U.S. companies often sell their drugs for lower prices than what the same drugs sell for in America.
Trump doesn't think this is fair. So his solution is to force U.S. pharmaceutical companies to charge Americans no more for prescription drugs than what they charge to their poorest customers in the world. According to Trump, this will result in pharmaceutical companies slashing prices in America to match prices in Bangladesh. The opposite will occur. Prices in Bangladesh and all other countries will be raised to match prices in the U.S.
The result will be a decline in earnings for U.S. pharmaceutical companies due to collapsing overseas sales. Since those companies will now have lower foreign profits to offset the cost of developing drugs, the price they charge for all drugs will go up, including here in the U.S. So the net result of the president's plan will be to lower U.S. pharmaceutical company profits and raise the prices Americans pay for prescription drugs.
If the Executive Order from Trump is effective then other nations will likely have to pay higher prices in order to have access to the same drugs, assuming the US is actually subsidizing thru higher prices drugs for other countries or the US consumer is getting ripped off
I think the actual cost of most drugs is substantially less than what US Consumers pay, the big pharmaceutical companies use the R&D issue as an excuse to charge more
How much R&D costs are really lobbyist expenses, media advertising and political donations and have nothing to do with Drug R&D
“He makes a few good points I feel...”
The only point he has is the one on the top of his head.
There is no valid market reason why the US should pay more than other places, it’s the result of cartel action.
I’m not comfortable with this action. It stinks like Nixon’s price controls. It takes a lot of money to bring a drug to market in America. It would make more sense to let drugs which have a history of working overseas be made and sold here.
Twelve years ago, I got a call to participate in a “mock-jury” at a local hotel in a large Bergen County hotel, where a presentation by both sides of a lawsuit were to be conducted by legal teams broadcast on huge monitors to a sizable audience who (if luckily chosen to make the $200 payment) would then retire to three separate rooms with a large roundtable and discuss the case and ourselves decide on the settlement amount...it was Pfizer vs. two smaller pharm companies, Teva of Israel and Sun of India, concerning a patent infringement case that had already been ten years in the making with no adjudication...it was over an acid reflux drug called Protonix== the lawyers representing Pfizer and the defendants Sun and Teva made highly sophisticated arguments on their behalf. and it was tempting to go with the defendants being sued, until you heard the thoroughly detailed and comprehensive arguments given by the Pfizer team-—absolutely mind-boggling were both side’s displays and presentations, and the amount of $$ and effort that must have gone into them...I don’t know about the other two mock jury decisions, but I was the jury foreman of our jury and we wound up giving about 95 % of the enormous amount of $2.15 BILLION dollars in damages to Pfizer——the REAL trial, to my surprise, took place only a few weeks later (thought it would be later) and the actual amount the real jury wound up giving was nearly identical to ours.Our heads were reeling with all the information presented to us,and we all left with a newly informed sense of just how much money is involved in this area of Big Pharm. unbelievable.
Schiff is a shill. Tired and weak argument “it takes a lot of money,”,etc etc....see my reply below also about a jury trial
thanks! great post....but 116 lbs is kinda light. How tall are you, if I might inquire?
When you spend $30 Billion each year on advertising, and $300 Million on lobbying, prices are gonna be high. The US government spends $150 Billion on pharmaceutical research annually, with no return on investment, then buys the drugs from pharmaceutical companies at near the highest price on earth. The federal government buys $450 Billion dollars of prescription drugs annually! We have a bigger “deficit” with big pharma than we do with China.
5’ 2”. or maybe a little less.
Light works for me. Weighed 140 15 years ago, looked good at that age, but at my advanced age, I like being. slim. Men in the ‘hood think I look great and younger than I am.
Exactly! Every country benefitting should share the expense.
I have to disagree with my libertarian friends on this one. Pharma has basically become socialist Obamacare for globalism with the US paying the burden. Many of our elderly are having to decide between medicine and and food.
Personally, I’ve never fallen for most of this garbage and look for alternative natural solutions. That’s not saying medicine isn’t appropriate in certain situations but most people don’t need what they’re selling.
At the end of the day, it all boils down to vulture capitalism where one takes advantage of others to make a profit and stay in business. I agree with Trump on this one.
Canned Alaska salmon is wild caught and organic
The bigger problem is that these companies charge far less for their products in wealthy countries that are perfectly capable of paying the same price as U.S. consumers but refuse to do so because they have government-run health care systems that control everything from top to bottom.
Read Robert Kennedy’s book on Fauci. Taxpayers pay for a large amount of the very expensive human trials for the pharma companies.
It is detailed and shocking.
Having said, that the Trump Administration should reduce some of the FDA costs of introducing new drugs. Not the testing, but some of the paperwork and delays.
Having said that, and based on recent personal experience. I am taking a medication that my Medicare Advantage insurer says costs about $400 to $500 per month and charges that to Medicare, but charges me a $150 copay. In Mexico recently, I waled into a pharmacy there and purchased it with no insurance for a cash price of about $90 for a 30 day supply. What I purchased was the exact same product, in factory packaging. It was not a generic, it was not something else.
I have other medications that I no longer purchase though my Medicare Advantage plan, because I can purchase them in the USA at a pharmacy for a cash price much less than my copay and much less than the insurance company charges Medicare (aka the federal government).
There are some very serious problems with the pricing of prescription drugs and Medicare (the insured and the taxpayers) are being ripped off.
Well done. Diet is, by far, the most important component of good health. Do you also avoid the seed oils: corn oil, soy oil, etc? What about excess sugar?
His point is stupid and a twist on socialism. Using the bargaining power of 330 million consumers to bully price fixing Pharma and the PBM’s is the ultimate act of capitalism. He negotiates a price and uses his leverage as the buyer for consumers who have no right or path to exercise a free market choice. You and the author could not be more wrong. And, his choice of indexing the price the US pays to the lowest Worldwide price among developed countries is entirely consistent with that principle. The US does not fix the price. The steps I heard described are that if the worldwide price goes higher than it is right now, that will be the price the US pays.
I count calories and eat everything I want; just 1680 calories per day of it.
I lost 85 pounds 8 years ago and have not varied more than 5 pounds up or down since. All my cardiac issues have disappeared.
Exactly!
I thought a primary concern of FReepers was their stock portfolio.
I think you might want to dump any pharma based on Schiff’s comments. He’s not often wrong about economics anyway...
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.