Info Service on Health Issues (May18/01)
15 May 2018
Third World Network
KEI on Trump's efforts to raise drug prices internationally
Published in SUNS #8680 dated 15 May 2018
Geneva, 14 May (Kanaga Raja) - The United States-based non-governmental
organisation Knowledge Ecology International (KEI) has voiced concerns
over efforts by the administration of US President Donald Trump to
force price increases for drugs sold in foreign countries.
These concerns were voiced in a statement issued on 11 May 2018 by
James Love, Director of KEI.
James Love said in the statement: "The Trump Administration is
proposing that the US government advocate higher drug prices in foreign
countries. We'll have to see the details of how this effort will be
managed, but the overall policy proposal is not new."
"Since the Reagan administration, every US president has worked
closely with big drug companies to advocate for broader, stronger
and more durable intellectual property rights for new medicines, regulatory
barriers to competition, and to weaken national efforts to lower drug
prices through restrictions on reimbursements, price controls or other
"For example, Presidents Obama, Bush and Clinton all sought similar
outcomes, efforts that are easily documented by merely reading two
reports published annually by the White House Office of the United
States Trade Representative (USTR)."
1. National Trade Estimate Report on Foreign Trade Barriers (see below
for examples), and
2. Special 301 Report (see: https://www.keionline.org/ustr/special301
for all 30 years of these reports).
There is much that can be said about this issue, but the most critical
1. Raising foreign drug prices, as was the result of early NAFTA negotiations
in Canada or the WTO negotiations that led to the TRIPS agreement,
does not lower US prices. In fact, the higher foreign prices are,
and the harder it is to obtain low cost generics outside the United
States, the easier it will be to charge higher prices in the United
2. Raising drug prices here or in foreign markets does in fact enhance
global incentives to invest in R&D for new products. That said,
it is not an efficient way to do so, since companies at best only
reinvest a small portion of revenues in R&D.
3. Governments around the world do not want higher drug prices, they
want lower prices, so influencing foreign drug prices is hard, particularly
when the higher prices lead to larger budget deficits and/or less
access, and contribute to otherwise preventable death and suffering
of the countries' own citizens.
4. The consequence of high drug prices is predictable access barriers,
greater disparities of access (based upon incomes), and abandonment
of all pretense that "access to medicine for all" is actually
5. A less expensive and more effective way to promote innovation and
to address free-riding is to focus on the low levels of public sector
funding for bio-medical research in many countries. Switzerland, for
example, is getting rich off its policy of letting the NIH finance
much of the R&D it licenses from universities and other NIH grant
recipients, while providing very little government funding for bio-medical
6.The US government should support rather than oppose new global norms
that would require our trading partners to match the R&D subsidies
that the NIH and other federal agencies provide, as well as the US
government-funded Orphan Drug Tax Credit. This is a way to address
cross-border contributions to R&D without killing people.
"We have watched several shifts in policies over the years in
regards to foreign drug prices. The most constant has been the steady
collaboration between the US Congress and the Executive Branch to
impose policies on foreign countries designed to raise drug prices,
something that takes place year in and year out.
"There have been a few notable exceptions to the pro-pharma and
anti-patient drift of policy, including decisions from 1999 to 2000
by President Clinton on HIV drug patents in sub-Saharan Africa (following
considerable outside pressure from HIV activists), the 2001 Doha Declaration
on the TRIPS Agreement and Public Health, and the 2007 new trade policy
adopted by President Bush which relaxed trade pressures on some issues.
"The Obama Administration worked very closely with big pharma
in ways too numerous to mention here, including involvement by Vice
President Joe Biden among others, and the Trump Administration has
taken a hard pro-pharma line on issues, almost immediately.
"The whole state of affairs is appalling, given what is known
about the human suffering associated with high and abusive drug prices,
and the US government's continued opposition to work on an R&D
agreement in the World Health Organization or other fora, and its
opposition to work on the de-linkage of R&D incentives from drug
prices, measures that would, if embraced, provide for a more promising
future where innovation, access, affordability and fairness would
all be feasible."
(The KEI statement can also be found at: https://www.keionline.org/27768)