Drug prices in this country actually came down last year for the first time in 50 years. That’s because Donald Trump’s president.”
Mick Mulvaney, April 7, 2019, on “Fox News Sunday”
President Donald Trump announced last month that the GOP will become “the party of health care,” and news reports suggest he intends to make it a top issue in his reelection campaign.
So when Mick Mulvaney, the acting White House chief of staff, touted the administration’s work on prescription drug prices — a hot-button issue that has drawn scrutiny from across the political spectrum, and one that voters say should be a top priority — we were intrigued.
On “Fox News Sunday” April 7, Mulvaney said: “Drug prices in this country actually came down last year for the first time in 50 years. That’s because Donald Trump’s president.”
This statement is particularly hard to prove affirmatively. Drug prices are measured through a host of metrics and affected by all sorts of political and economic forces.
We reached out to the White House for more explanation. Its staff directed us to a report published last October by its Council of Economic Advisers, as well as to data suggesting the consumer price index for prescription drugs declined in January 2019 compared with January 2018.
But experts who reviewed that data said it doesn’t necessarily support Mulvaney’s claim — and certainly not by the magnitude he suggests.
A Broad Brush, And Some Missing Data
We interviewed five experts who all agreed that, no matter which metric was used, evidence is lacking to unequivocally say drug prices decreased last year. The most generous reading came from Matthew Fiedler, a health economist at the Brookings Institution: It’s “within spitting distance of something that’s true.”
But with more examination, the claim’s veracity became murkier.
“Drug prices” can refer to many things: a list price, a net price (what is paid after rebates, or the discounts negotiated by insurers or other payers), the pharmacy’s price or total national spending on prescription drugs.
Let’s start with the latter. Data from the Kaiser Family Foundation shows total spending on prescription drug prices has climbed during the past several years. (KHN is an editorially independent program of the foundation.) In 2018, total spending continued to grow, just at a slower pace. That’s a positive trend, experts noted, but it isn’t the same thing as spending going down.
“It doesn’t mean we’re spending less money on drugs than before,” said Stacie Dusetzina, an associate professor of health policy at Vanderbilt University.
We also examined the CPI data the White House provided. It could suggest that in the past year prescription drugs’ list prices have indeed dropped, and even by a meaningful amount.
But the CPI data doesn’t account for whether manufacturers lowering their list prices have also changed the size of the rebates they provide. That’s essential information in understanding if the real price of a drug — what insurance pays and, ultimately, what consumers pay — has actually changed.
These trend lines also vary depending on the 12-month period they cover, argued Walid Gellad, an associate health policy professor at the University of Pittsburgh. January to January could show a list price decrease, but July to July could show an increase.
Plus, the CPI data includes only drugs sold through retail, or about three-fourths of all prescriptions. That excludes many high-priced specialty meds sold only via mail order, argued Michael Rea, who heads Rx Savings Solutions, a consulting firm.
It also paints with a broad brush — obscuring, many said, just how many list prices are continuing to climb.
This year, the list price of more than 3,000 drugs went up, while the price of only 117 went down, according to data compiled by Rx Savings Solutions. Last year, an analysis by the Associated Press revealed that, from January to July, 4,412 branded drug prices went up, while 46 were cut.
So, Mulvaney’s downward price claim didn’t come out of thin air. But interpreting the data to mean that drug prices are down ignores crucial parts of the prescription drug marketplace.
The White House’s Work
Mulvaney also said Trump has played a key role in bringing down drug prices. When we asked the administration what he meant, a spokesman pointed to their efforts to bring more generic drugs to market — a boost the White House said has fueled competition and helped make lower-price alternatives available to consumers.
But there’s no evidence yet to suggest that the boost in generic drug approvals has that effect. Experts said it takes time for these products to reach the marketplace, create competition and demonstrate a measurable impact on prices.
Indeed, many of those generics, while approved, never went to market. This White House assertion also doesn’t account for high-priced, branded drugs that lack a generic counterpart.
Yes, Trump’s tough talk — accusing pharma companies of “getting away with murder” — may have persuaded some drug manufacturers to hold off on increasing their prices — at least temporarily, or until after the government releases key stats on how many prices have gone up, Dusetzina said. But it’s hard to separate that phenomenon from the pressure also levied by Congress and state legislatures.
For what it’s worth, the administration has proposed many new policies meant to curb drug prices, many noted, such as eliminating some kinds of rebates, or changing how Medicare Part B pays for drugs. But none of those have taken effect — so they haven’t brought prices down.
Mulvaney said, “Drug prices in this country actually came down last year for the first time in 50 years. That’s because Donald Trump’s president.”
At first glance, CPI data could conceivably support the argument that the list prices for some prescription drugs dipped. But that data doesn’t include many high-priced specialty drugs that drive costs up, and the pattern it illustrates can change based on the time frame selected.
The CPI data set obscures the individual drugs for which the list prices have increased — with far more going up than down. It also does not account for a drug’s true “net price.”
Mulvaney’s statement also does not reflect trends showing that, nationally, spending on drugs has continued to climb, even if that growth has slowed. There is also no evidence to support the argument that Trump himself is responsible for changes in drug pricing.
This claim has an element of truth, but it ignores key facts and context that would give a very different impression. We rate this claim Mostly False.
This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.