Written by Michelle Flatt.

Will New FDA Guidance Really Lower Drug Prices?

One of the concerns most often voiced by Americans regarding healthcare is the high cost of prescription drugs. Even with insurance, not all drugs are affordable to every patient, while the same exact medication may be much more accessible to those living in other, comparable nations.

For example, Humira is one of the most commonly prescribed medications around the world. Used to treat many different ailments, such as psoriasis and arthritis, sales of the injectable drug topped $16 billion dollars worldwide in 2016. Patients in around the globe get the exact same product, manufactured by AbbVie Inc, but the prices they pay for their individual prescriptions vary wildly. In the United Kingdom, a Humira prescription costs about $1400, while in Switzerland it’s $820. By contrast, the United States has a hefty $2700 price tag on that same medication. Why is this?

The system in the United States is set-up much differently than those of other countries. Here, we do not negotiate or set limits on new prescription drugs as they enter the marketplace. Elsewhere, there are government agencies whose role is to weigh the benefits of new drugs and determine if the price is worth the cost. The reason these prices are government regulated around the world in ways that prices for consumer goods are not, is that, unlike stereos or furniture, medication is essential. Affordable access to medication is seen as a human right.

The benefit of our system is that it rewards innovation and encourages investment in research and development of new drugs. On the downside, these drugs come with a cost that renders them inaccessible to many people who need them.

President Trump has recently taken some drugmakers to task over this, using Twitter to call out Pfizer by name, stating that “They are merely taking advantage of the poor & others unable to defend themselves, while at the same time giving bargain basement prices to other countries in Europe & elsewhere.“

Pfizer responded with assurance that they will not increase prices until their CEO has met with the president and discussed a plan. Consequently, other drug companies, such as Merck & Co., are also holding off on any price changes, because they don’t want to be the next ones called on the carpet by the President.

In an effort to be seen as actively battling high drug prices, the Trump administration released new guidance via the FDA in late July. Promoting the development of low-cost, generic, abuse-deterrent formulations of common pain medications, this guidance also aims to create more affordable options in important markets, such as device-drug combinations.

The same week, FDA Commissioner Scott Gottlieb, MD announced the long awaited Biosimilar Action Plan, which hopes to increase competition in the rapidly emerging market.

“While less than 2% of Americans use biologics, they represent 40% of total spending on prescription drugs,” he said in an address to the Brookings Institution. “Enabling a path to competition for biologics from biosimilars is a key to reducing costs and facilitating more innovation.” Gottlieb went on to say that the U.S. should “adopt a different approach to paying for these drugs. An ideal system would reimburse biologics in a competitively bid scheme, where we could take full advantage of the multi-source competition.”

Critics say that the changes and guidance being rolled out are mere window dressing. They accuse the president of using Twitter call-outs to appear tough on drugmakers while not making any significant changes. They also feel that the pharmaceutical companies are saving face by reducing prices on drugs, but only those that are less widely used or whose sales have been declining in recent years, rather than on more popular profit-generating medications.

As with most of the places where government and medicine intersect, there is a great deal of uncertainty regarding what changes will be coming our way in the near future. Emerald Coast Medical Association provides a strong network to offer guidance and support to our members as new guidelines are enacted and new laws are implemented.

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