While the NYT gasses on about how TrumpRx isn’t a big deal and won’t really affect prices, the rest of the world is reacting like a salted snail being boiled in apple cider vinegar. Behold this remarkable Bloomberg headline: “Trump’s Attempt to Make Drugs Cheaper Is Pushing Up Prices in Other Countries.” Ouch.
For decades, Americans have paid the highest prices for drugs on planet Earth, more than citizens of any other country, effectively subsidizing the rest of the world’s healthcare. That allowed Democrats to point at the other countries as stellar examples of how well socialized medicine works. Well, bucko, there’s trouble brewing in them thar hills. Of Davos.
President Trump has now flipped the script. He insists that Americans pay the lowest price, at least equal to the best deal pharma offers any other country’s Marxist medical plan.
Unsurprisingly, the other countries who’ve been freeloading off us don’t like it. “The Swiss cannot and must not pay for price reductions in the USA with their health insurance premiums,” Switzerland’s hyphenated home affairs minister Elisabeth Baume-Schneider insisted this week. So now it’s not fair. “‘Big Pharma’ should not be a swear word,” Swiss trade negotiator Helene Budliger Artieda said recently at the World Economic Forum in Davos.
The basic problem is that, since Americans subsidize so many drugs, pharma simply can’t afford to charge everyone the same low price. Under the new rules, the average price must come up. But Switzerland is kicking. The Scandinavian darling is stubbornly refusing to pay more. The result is that some drugs are dropping off Switzerland’s socialized drug schedule, such as a Roche breast-cancer drug, which “might not be available to Swiss patients.”
Roche is a Swiss drugmaker. So, in other words, Swiss pharma is threatening to withhold cancer drugs from Swiss patients unless Americans keep subsidizing them. They’re holding their own country hostage. Brilliant.
It is also unsurprising that we’re hearing the first and loudest complaints from Switzerland. Over half of its total exports are pharmaceuticals— drugs sold to Americans at inflated prices. In other words, 9 million Swiss built half of their export economy on overcharging 330 million Americans for medicine. Now they’re calling fair pricing an “existential threat.”
They’re not completely wrong. You will also be unsurprised to know that, thanks to American largesse, the Swiss tax their pharma giants to the moon. Add Trump’s new policies, and things are getting tight. “Lower prices will further shrink profit margins,” Bloomberg explained. “Add on a recent increase in Switzerland’s corporate tax rates,” the article continued, “and developing drugs in the country will become increasingly uncompetitive regardless of its long-standing expertise.”
The drugmakers can see which way the regulatory winds are blowing, and they aren’t waiting around. Swiss job losses are mounting. Novartis announced cuts to hundreds of manufacturing positions. Pfizer has sharply downsized its operations there, and Johnson & Johnson is exiting Swiss vaccine production altogether.
“I have never seen conditions in Switzerland this tough,” says Yuliya Feliziani, a pharma recruiter in Zurich. “Layoffs are increasing, and finding a new role has become exceptionally difficult, even for strong, experienced candidates.”
While I sympathize with ordinary Swiss whose socialist healthcare system is cutting them off from drugs because Americans aren’t paying ten times as much anymore, you can’t avoid savoring the irony as these “free” healthcare societies grapple with having to pay for their own medicines.
We are about to learn that we have long been paying for everyone else’s socialized healthcare.
Let the Times keep telling its readers that Trump’s healthcare policies aren’t really making healthcare more affordable. But it’s too late. Everybody already knows.
