Donald Trump vows to end 'rip off' prescription drug prices by targeting middle men and lobbyists

US President Donald Trump has targeted “middlemen” and lobbyists in a much-anticipated speech on lowering during prices.

“This is a total rip off and we are ending it,” the president said, about the effort of the administration to “bring soaring [prescription] drug prices back down to earth”. Speaking in the Rose Garden of the White House, Mr Trump said he was “eliminating the middlemen” and emphasising competition within the drug industry.

The announcement on Friday is related to Mr Trump’s campaign promise of not allowing the pharmaceutical industry to “get away with murder,” a phrase he also used in a cabinet meeting in October 2017. The US does not regulate medicine prices as some other countries do.

In that meeting, Mr Trump said: “The drug prices have gone through the roof. And if you look at the same exact drug by the same exact company, made in the same exact box and sold someplace else, sometimes it’s a fraction of what we pay in this country — meaning, as usual, the world is taking advantage of the US. They’re setting prices in other countries and we’re not.”

The Associated Press reported that new medicines for cancer and other life-threatening diseases often launch with prices exceeding $100,000 per year. Drugs for common ailments like diabetes and asthma routinely see price hikes around 10 percent annually. Meanwhile, some companies have been buying up once-cheap older drugs and hiking prices by 1,000 percent or more.

However, the administration’s strategy appeared to be less head-on with the powerful pharmaceutical industry than Mr Trump’s fiery campaign rhetoric pledged. The new policy is more indirect, encouraging more companies to enter the marketplace rather than addressing the underlying issue.

For instance, despite promising to “eliminate the middle men”, the administration’s new policy will not include giving the federally-run Medicare programme – a national health insurance scheme funded by a payroll tax and meant for Americans aged 65 or over or those with disabilities – the ability to directly negotiate medicine prices.

The idea of changing that law barring negotiations had been floated by Mr Trump, but vehemently opposed to by the industry and congressional Republicans who rely on campaign contributions from them. Medicare is the largest purchases of prescription drugs as it covers more than 60 million Americans.

What could also make it hard for patients see any real difference in drug prices is that Mr Trump has staffed his administration with former pharmaceutical executives, including Secretary of Health and Human Services Alex Azar, who used to work for drug giant Eli Lilly and Food and Drug Administration chief Scott Gottlieb, who had to sign an agreement recusing himself from decisions related to the 20 drug companies he had worked with at some point as a physician like GSK and Bristol-Meyers Squibb.

As a result of the Medicare issue and the fragmented nature of the industry’s other large bulk customers, the US spends approximately $1,162 per person on prescription drugs according to 2015 data analysed by the Organisation for Economic Cooperation and Development. Canada and the UK – who have government measures to stem the cost of medicines – pay $756 and $497 respectively.