The Trump administration should make the rising cost of medicine a leading issue in trade talks with countries around the world, Mount Sinai Health System CEO Kenneth Davis told CNBC on Friday.
“We marvel at the fact that U.S. drug costs are two to six times higher than they are in the rest of the world,” he said on “Power Lunch. “
“What I don’t understand is why in trade talk don’t we make this a prominent issue?” he added. “Why don’t we say, ‘You guys can’t allow the U.S. consumer to be subsidizing all the R&D costs of drug development. You’ve got to pay your fair share. We want to see you add 20% to the cost of your drugs.'”
Because the United States is a free market, prices are higher. Meanwhile, in other parts of the world, governments pay for the drugs and they set the price, Davis said.
If other countries pick up more of the cost, then American consumers should be able to contribute less. Of course, for the plan to work, the manufacturers also have to agree not to raise U.S. prices, but instead lower them in proportion to the increased pay they are getting from other countries, he noted.
“The U.S. is being unfairly penalized here for the cost of drugs around the world.”
Health and Human Services Secretary Alex Azar listens as U.S. President Donald Trump delivers a speech about lowering prescription drug prices from the Rose Garden at the White House in Washington, U.S., May 11, 2018.
Jonathan Ernst | Reuters
Fixing sky-high drug costs is an issue both Republicans and Democrats have rallied around.
For one, Sen. Bernie Sanders, a Vermont independent who is making another run for the White House, has vowed to slash prices in half if he wins the 2020 election.
President Donald Trump has also called out drugmakers and has put forth some proposals.
One calls for an internal pricing index (IPI) that would determine what Medicare pays for certain medicines based on the prices set in a handful of other countries. A proposed version of the rule is expected in August. However, on Thursday, Merck CEO Ken Frazier said if it is implemented, there will be legal challenges.
Also, last month the White House announced pharmaceutical companies will be required to disclose the price of their prescription drugs in TV commercials. Three U.S. drugmakers, including Merck, have sued the U.S. Department of Health and Human Services over the new regulation.
— Reuters contributed to this report.