GLP1s and Tariffs, the story so far
We take a look at the various movements in GLP1 policy by the Trump administration, so far.
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It's hard to keep track of everything the new Trump administration plans to do that might affect Tariffs. There are conflicting opinions, actions, and guidance coming from the administration every day – and the importance of the administrations actions on the use and adoption of GLP1 Receptor Agonists is profound.
This article is an attempt to summarize where we were, where we are, and where we think the treatment of GLP1 (in the wider context of the current administration's drug policy is going) is going.
Early on, worry about RFK Jr. was widespread
Before taking office most (including this publication) were worried about the effect that RFK Jr. might have on the pharamaceutical industry and adoption of GLP1s in general.
During his Senate confirmation hearing, he praised GLP1s as miracle drugs but cautioned against their use for children or being seen as a silver bullet:
GLP-1 drugs, the class of drugs, are miracle drugs, but I do not think they should be the first frontline intervention for 6-year-old kids for whom they are currently.
- RFK Jr.
Public movements/proclamations made by RFK Jr. have been positive and reasonable for the most part, as he has taken a focus on removing synthetic food dyes:
ABC News
This is generally a common-sense health benefit that many have been pushing for, and is welcomed.
Pause and fear around RFK's appointment may have been overblown.
Then: a Trade War, with direct threats to Pharmaceutical companies
The Trump administration opened the year by starting a trade war with various countries – seeking to rewrite trade agreements and the balance of trade widely with the world.
With relation to GLP1s, foreign pharmaceutical companies were singled out as an industry to be aggressively tariffed, with a "big tax to pay".
This lead to stockpiling medicines, and aggressive lobbying by pharmaceutical corporations:
Michael Erman, Maggie Fick and Lisa Baertlein, USA TODAY
Fraiser Kansteiner
The threat eventually fizzled out somewhat, with the fear of reciprocal tariffs removed, due to a carve-out:
J. Edward Moreno
It's impossible to know when the trade war will truly end or when policites regarding reciprocal or non-reciprocal tariffs will re-appear, but it seems that an extreme rise in costs for importers (which will be passed on to consumers) is avoided for now.
Some Pharmaceuticals take an aggressive stance
Some Pharmaceutical companies have responded in kind – vowing to increase drug prices if the administration increases tariffs:
For those who may not remember Teva, they were the generic producer of Liraglutide – one of the only GLP1s that has come out from patent protection:
GLP1.Guide Staff
Then: Cutting funding to GLP1s
Perhaps the most substantial development related to GLP1s so far has been the refusal to approve the Biden-era proposal covering GLP1s under medicare and medicaid:
The ACG News Team
(You can read the PDF containing the rule change, or download it below)
This is a blow to many, because as we've shared before, the cohorts taking GLP1s are increasingly older Americans, and that segment is growing quickly:
GLP1.Guide Staff
The Government was also set to embark on price negotiations for the drugs, likely leading to lower prices:
GLP1.Guide Staff
While the Biden administration could have done more (and earlier) to ensure that their proposal could have taken effect, the lack of coverage for GLP1s under medicare and medicaid will reduce accessibility for these medications.
Now: A promise to cut drug prices by Executive Order
Trump has since announced that he'll sign an executive order that aims to cut prices:
Tami Luhby
If we go straight to the actual executive order:
The White House
The meat of the order is concentrated on four points:
- Preventing undercutting of prices and price spikes in the US
- Administration communicating price targets
- Enabling Direct purchase for American patients
- Ensuring "most-favored-nation" pricing
These rules seem to be mostly a reinstatement of the status quo, and were welcomed by wall street afterwards, with pharmaceutical company stocks breathing a sigh of relief.
The Guardian's coverage of this notes the important fact that this has indeed been tried before, and the most important part might be the "most favored nation" pricing:
Julia Kollewe
Trump’s attempts during the final months of his first term to bring down drug prices were struck down in federal court. That “most favoured nation” plan would have tied reimbursements for 50 drugs by Medicare to the lowest prices paid by certain other countries.
A federal judge blocked the move after ruling that the administration had failed to give the public a chance to comment. The Biden administration dropped the proposal under pressure from hospitals and drug companies, but last year Medicare started negotiating some prices for the first time, under the Inflation Reduction Act.
It's unclear how much the current administration will push the executive order, but there's reason to be hopeful that prices for GLP1s will come down.
