Donald Trump is ready to use trade talks to force the National Health Service to pay more for its drugs as part of his scheme to “put American patients first”.
Mr Trump has claimed that the high costs faced by US patients are a direct result of other countries’ health services “freeloading” at America’s expense.
Alex Azar, the US Health and Human Services Secretary, has said Washington will use its muscle to push up drug prices abroad, to lower the cost paid by patients in the United States.
“On the foreign side, we need to, through our trade negotiations and agreements, pressure them,” Azar said on CNBC.
“And so we pay less, they pay more. It shouldn’t be a one-way ratchet. We all have some skin in this game.”
He continued: “The reason why they are getting better net prices than we get is their socialised system.”
In the UK, prices are dictated in part by National Institute for Health and Care Excellence (NICE) which has been successful in securing discounts for some of the costliest drugs.
Single-payer government-run health services like the NHS are able to use their negotiating muscle to pay far lower prices than their fragmented insurance-based private American counterparts, to the fury of the US president.
“America will not be cheated any longer, and especially will not be cheated by foreign countries,” Mr Trump said.
“In some cases, medicine that costs a few dollars in a foreign country costs hundreds of dollars in America for the same pill, with the same ingredients, in the same package, made in the same plant. That is unacceptable.
“It’s unfair. It’s ridiculous. It’s not going to happen any longer. It’s time to end the global freeloading once and for all.”
The pharmaceutical companies in the US are among the biggest corporate political donors and Democrats accused the US president of looking after the industry rather than patients.
Lowering drug prices was one of Donald Trump’s key campaign promises and he hopes to achieve this by making other countries pay more.
“I think this applies to all advanced countries, including the UK,” said Paul Ginsburg, professor of health policy at the University of Southern California.
“This effort to change other nations’ health policies will be driven by the US Trade Representative Bob Lighthizer when he is negotiating deals to avoid application of US tariffs or, in the case of the UK, a bilateral trade deal post-Brexit,” said Brandon Barford, a partner at Washington-based Beacon Policy Advisors.
“The second goal is that, for the UK in particular, trade negotiations will likely occur in the run-up to the US Presidential election in November 2020.
“The President and his team want to be able to use the NHS and NICE as a foil for his plan that reduces costs for consumers at the point of sale, but without rationing and access restrictions for which the UK system is infamous in the US, particularly amongst conservative media.”
Britain’s lower drug prices date back to an agreement reached between the industry and the NHS in 1957, which was designed to “achieve a financial balance in the interests of patients, the National Health Service, taxpayers, and the pharmaceutical industry.”
While prices in the UK are controlled, in the US they are left to the market and the differences can be dramatic.
For example, Americans paid an average of £1,964 ($2,669) for Humira, an injectable drug used to treat an array of autoimmune diseases including ulcerative colitis. The cost for a British patient is £1,003 ($1,362).
According to the latest figures the NHS spent £15.4 billion on medicines in 2016-17; only salaries cost the health service more.
In the UK there was some debate over whether the US could impose higher drug prices on the UK.
“How much the UK spends on healthcare and on medicines is a matter for the UK government and it is not clear to us how the US or any other government would influence this,” said Richard Torbett of the Association of the British Pharmaceutical Industry.
“The way medicines’ prices are set in the UK is governed by a voluntary agreement called the Pharmaceutical Price Regulation Scheme, which is negotiated between the global industry and the UK government.”
Nigel Edwards, chief executive of the Nuffield Trust, an independent health think tank, disputed that British patients were freeloading at the expense of their American counterparts.
“There is no reason to suppose that more expensive prices for drugs in Europe would translate into cheaper prices in the US.
“USA healthcare prices are generally higher than in Europe and the absence of the sort of large-scale negotiation by the US government does not help.
“This is more likely to be the cause of high drugs pricing, rather than one side of the Atlantic subsidising the other. ”
– Telegraph News