At his first post-election press conference, Donald Trump declared that pharmaceutical companies are “getting away with murder” by pricing their drugs too high. “Pharma has a lot of lobbies, a lot of lobbyists, and a lot of power. And there’s very little bidding on drugs,” Trump said in January. “We’re the largest buyer of drugs in the world, and yet we don’t bid properly.” At a meeting with pharmaceutical company executives later in January, Trump stated, “The U.S. drug companies have produced extraordinary results for our country, but the pricing has been astronomical for our country.” He added, “For Medicare, for Medicaid, we have to get the prices way down.”
Trump was characteristically vague about just how he would lower pharmaceutical prices. Here’s why he should avoid resorting to price controls to lower the cost of drugs for Medicare participants.