It is no secret that President Trump is trying to shake up the Healthcare system in the US. After being sworn into office earlier this year, he has taken initial steps to repeal the Affordable Care Act (ACA), and has promised to create a new, better system for covering healthcare costs. He has also vowed to put an end to rising drug prices, telling pharmaceutical companies that they have been “getting away with murder” with their current pricing strategies.
But Trump isn’t stopping there. Recently, the President has also committed to reducing regulations in the US by a whopping 75% in order to make it easier for drug companies to get their products to market.
According to Trump, it is impossible to get things done in a timely and efficient manner under the current regulatory system, across all sectors of the economy, not just healthcare. He has asserted that the only way to change this, and make America more business-friendly, is to undergo massive regulation cuts.
Some might see this as a big win for drug manufacturers; the quicker their drugs become available to patients, the quicker they can start to make revenue to offset the substantial R&D costs incurred.
However, there are others who are more skeptical.
Some drug manufacturers argue that a robust review process is necessary for them to be able to prove the value of their product to patients and insurers. The extensive testing that new drugs must undergo may be time-consuming and expensive, but it ensures that the drugs that do make it to market are safe and effective and offer increased benefit to patients. However, if regulations are cut, as Trump is proposing, then less will be known about the safety and efficacy of new products, meaning patients might be less willing to try them, and insurances companies might be less willing to cover them.
For drug companies developing pioneer treatments for rare diseases, this might not be much of a concern. But for those manufacturers producing a product for a more common disease, for which there is already at least one drug approved and available to patients on the market, there is more at stake. If patients have an alternative treatment option(s), there will be little incentive for them to make the switch to a new product, about which there is less known. Furthermore, insurers will most likely refuse to cover a new drug without adequate proof that it is better than what is already available.
While these concerns remain very real for many pharmaceutical company executives, there are some economists that claim that Trump’s promise of a 75% cut is completely overexaggerated and unobtainable. According to Peter Van Doren, an economist with the Cato Institute, no past president has been able to undo that many regulations. So, if history is anything to go by, there will be change, but only in the small to moderate range.
For now, however, it seems that pharmaceutical companies will simply have to wait and see just how small, or how great, the change will actually be.