Moody’s chief economist John Lonski discusses how the U.S. pays more for prescription drugs than European countries.
President Donald Trump’s plan to lower the price of prescription drugs is long overdue, according to John Lonski, chief economist at Moody’s Capital Markets Research Group.
Lonski criticized past presidents – particularly Barack Obama, who made affordable healthcare a lynchpin during his eight years in office – for not addressing skyrocketing pharmaceutical prices or the record amount of money spent on Medicare. Lonski blamed that, in part, on campaign donations and speaking fees that previous presidents didn’t want to forfeit.
“This type of action is long overdue,” Lonski told Trish Regan during a FOX Business interview on Friday. “The U.S. government has the clout to have greater influence over drug prices, and it should go ahead and use that clout.”
Trump’s blueprint, published on Friday, includes 50 steps intended to reduce drug price, which rose nearly 25% from 2012 to 2016, according to health insurer Aetna.
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The administration is proposing a focus on increasing competition in the industry by making it easier for cheaper, generic drugs to reach the market; reducing consumers’ out-of-pocket spending on medicines; cutting incentives for doctors to write high-price prescriptions; and passing a large portion of rebates directly to consumers – particularly Medicare patients.
Reducing drug prices, according to Lonski, is also partially a trade problem. During his address, the president said he will make a priority of market access during trade negotiations so Americans don’t pay more for drugs than patients in other countries. According to the International Federation of Health Plans, Americans can pay two to six times more than the rest of the world for brand-name prescription drugs.
“The poor U.S. consumer and taxpayer is not only subsidizing the rest of the world in terms of what we spend on defense, but also what we spend on medicine, mostly because these foreign countries get a discount from drugmakers that the American consumer doesn’t receive,” Lonski said. “It’s not fair, and I hope that does change.”