Colleen Carey

Assistant Professor of Policy Analysis & Management

Colleen Carey, associate professor at Cornell University, focuses on the industrial organization of health care, with special attention to federal regulation of health insurance markets.

Carey says:

“Monday was the deadline for a Trump demand for voluntary ‘most-favored nation’ pricing for prescription drug fills for Medicaid patients and for all newly-launched drugs. In addition, the industry has been under threat of tariffs for offshore production, upsetting the arrangements by which the industry produces drugs in one location, sells them in another, and claims all the profits in a third. The industry group PhRMA responded with an op-ed in the Washington Post that was, frankly, weak. The industry promised to onshore manufacturing, introduce direct sales portals, and invest in patient assistance programs. 

“Relative to a year ago, on-shoring manufacturing is a real change of behavior, although with decade-long time horizons it remains to be seen whether those new plants will really be built. Direct sales to consumers have been available through Lilly Direct for nearly two years, so the announcement of more such products is simply another ‘me too’ product for Lilly’s competitors. 

“New users can join the scores of patients struggling to use their insurance to help them buy drugs through these portals, which encourage self-pay. This will be a more pressing question if it’s typically-covered drugs for blood clots or arthritis instead of typically-excluded drugs for weight loss. Patient assistance programs are always good PR, but they are a long way from the lower prices demanded by Trump.

“It's hard to tell whether the Pfizer-Trump announcement is the same policies with a gold-plated branding or something closer to what Trump originally asked for. Seemingly, Pfizer agreed to lower prices in Medicaid to a composite based on other countries’ prices and also promised to use that composite for new drugs. In exchange, it gets a three-year exemption from tariffs. And while PhRMA said the direct-sales portal would be known as AmericasMedicines.com, Pfizer will be offering drugs through TrumpRx.com. 

“In the next few weeks, I’ll be curious to see whether Pfizer’s actions create or alleviate pressure on the industry.”