Trump had a lot to say about the pharmaceutical industry — here are the facts by Dylan Scott, Ed Silverman, Damian Garde on Jan 31, 2017, 4:24 PM Advertisement
 WASHINGTON — President Trump has ambitious plans to overhaul the drug market, speeding approvals while bringing down prices. It sounds great. But soundbites can be deceiving. So we gave Trump's rhetoric a reality check: THE CLAIM: "They come with a new drug for a patient who's terminal, and the FDA says, 'We can't have this drug used on the patient.'" THE REALITY: Trump sounded here like he was endorsing the "right-to-try" movement, which would give terminally ill patients more freedom to try experimental treatments that have passed basic safety tests but haven't yet been proved effective. One problem: Drug companies are often not keen on providing experimental medicines to patients. They may only have a small supply of the drug — and need it for clinical trials. They may also fear that negative publicity over side effects could cloud their chances of getting the drug approved down the road. When an experimental drug is available and a physician requests it, the Food and Drug Administration approves it more than 90 percent of the time. The agency has also made it quicker to submit requests. THE CLAIM: "We're going to be ending global freeloading … [and] foreign price controls [that] reduce the resources of American drug companies to finance drug and R&D innovation. … It's very unfair to this country." THE REALITY: Trump appears to suggest that he has an easy fix for a complicated problem. Yes, it's true that many foreign governments — including those in wealthy nations such as the UK, France and Germany — successfully limit drug prices. But it is unclear how the president hopes to convince — or force — other governments to pay "their fair share" so that drug companies start collecting higher profits from foreign sales. You can imagine how well this will go over in London, Berlin, and Paris. And those are wealthy countries. It's unlikely that many of the nations paying the lowest prices for certain drugs, such as Egypt, will be able to come up with the resources to pay more, no matter how much Trump harangues them. THE CLAIM: "I read where it costs sometimes $2.5 billion — on average, actually — to come up with a new product. Fifteen years, $2.5 billion to come up with a product where there's not even a safety problem. So it's crazy." THE REALITY: Trump is quoting a statistic widely cited by pharmaceutical companies: According to the Tufts Center for the Study of Drug Development, the average cost to develop a drug and get it through the FDA is more than $2.5 billion when factoring in the high rate of failure. But there are caveats. For one, the Tufts center is largely funded by the industry. Also, that $2.5 billion includes opportunity cost — how much the company could have made by investing its R&D funds elsewhere. The actual out-of-pocket cost is more like $1.4 billion, according to Tufts. Not everyone agrees. Public Citizen has called Tufts's study an "R&D scare card." Harvard Medical School's Dr. Jerry Avorn, writing in the New England Journal of Medicine, said the study vastly overstates the opportunity cost and fails to account for how much companies rely on taxpayer-funded research to jump start their drug development. Then there's this: In his remarks, Trump seemed to attribute a lot of the expense and time to over-regulation. But much of it has to do with the fact that human biology is complicated; virtually all drug companies spend many years and many millions on promising compounds that, in the end, just don't work. That's how science works. Once a company has good data, the FDA approval process is moving faster than ever. According to the agency's most recent progress report, the standard review process now takes a median 10 months, down from nearly 13 months in 2005. Companies can shave another two months off if they get a priority review. In fiscal year 2014, the most recent data available, 92 percent of drugs were approved on first pass, up from 60 percent in 2005. THE CLAIM: "A lot of the companies have moved out; they don't make the drugs in our country anymore. A lot of that has to do with regulation, a lot of it has to do with the fact that other [countries] take advantage of us with their money and their money supply and deregulation." THE REALITY: Manufacturing is an expensive proposition. And some executives agree with Trump that regulation can be a barrier. "In many respects, it is over-regulated here. We're in New Jersey and it could take a while to pull the necessary building permits" to break ground on a new factory, said John Crowley, chief executive of Amicus Therapeutics. But drug makers open plants elsewhere for many reasons beyond red tape — including tax incentives, labor costs and, in some cases, the need to serve certain geographic markets more efficiently. For smaller companies, it can also be a lot faster to hire a manufacturer abroad than to try to find a US factory with the bandwidth to take on a contract job. "There are companies here, but you need to get in the queue to get your drug made by them," said Crowley. His company tapped WuXi Biologics in China to supply a drug it's developing for Pompe disease. "I'm not sure it's any less expensive than another company, but they have people with expertise and a cutting edge system," he said. And clearly, there are many companies with manufacturing facilities in the US. "We don't make everything here, but we do make a lot," David Redfern, chief strategy officer at GlaxoSmithKline, recently told STAT. The company, which is based in the UK, makes prescription drugs for HIV and respiratory ailments, as well as over-the-counter medicines, at nine US plants that employ some 15,000 people. THE CLAIM: "We can increase competition and bidding wars, big time." THE REALITY: Trump has repeatedly promised to let government programs negotiate the prices they pay for drugs. But the official scorekeepers at the Congressional Budget Office aren't sure that would actually yield any savings, in part because drug makers are already required to give discounts to Medicare and Medicaid. The only way to squeeze real money out of the system may be for the administration to take a politically risky step, like refusing to cover the priciest drugs. You can already imagine the ads that opponents would roll out, showing tearful grandparents who can't get their cancer treatment because Medicare won't cover it. Another possible hitch: Representative Tom Price, the president's nominee for health secretary, has been ambivalent about endorsing such negotiations. Congressional Republicans aren't too keen on it, either. SEE ALSO: Trump just met with the heads of drug companies — here's how it went
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