Trump seeks to make pharmaceutical companies competitive, lower drug prices
- Nathaniel Lee
President Trump on Friday unveiled his administration's plan for lowering prescription drug prices, vowing to "take on" the powerful pharmaceutical industry while calling for an end to "global freeloading" that has allowed foreign countries to pay less for American medicine.
Many of those ideas would require legislation and congressional approval.
One big idea not included in the blueprint is a call for the federal government to have Medicare negotiate drug prices.
- A potential requirement for drugmakers to disclose the cost of their medicines in television advertisements. "The president is breaking his promise to the American people to allow Medicare to negotiate lower drug prices, which would save seniors billions of dollars at the pharmacy".
The Trump administration is seeking to pass a larger portion of rebates directly to consumers, particularly Medicare patients.
Health and Human Services Secretary Alex Azar said during a White House briefing that numerous actions the government was considering would not require the U.S. Congress, but could take place through executive action within months.
AHIP argued in a blog post two days ago that, in many cases, drug companies use rebates to encourage patients to ignore the underlying cost of drugs and use more expensive versions of the drugs.
This blueprint is a historic plan for bringing down the high price of drugs and reducing out-of-pocket costs for the American consumer.
In his Rose Garden comments, Trump also singled out what he called greedy companies and middlemen, who he declared had grown rich through "dishonest double-dealing", vowing his administration is now "putting American patients first".
The plan also would give private health insurers that run Medicare plans more negotiating power with drugmakers.
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Azar, in his briefing, emphasized his desire to change the way pharmacy benefit managers operate - specifically a system where they negotiate rebates off high drug prices.
Azar and other Trump officials have described the pricing problem in stark terms and promised bold action.
But, whether parts of the administration's new proposals requiring congressional actions - mostly within the realm of competition and negotiation - can gain traction remains uncertain. Those steps include: requiring insurers to share rebates from drug companies with Medicare patients and changing the way Medicare pays for high-priced drugs administered at doctors' offices. But the officials gave few specifics.
CVS Health Corp., a pharmacy benefit manager, released a statement saying that policies to lower drug prices for consumers and reduce out-of-pocket costs are "aligned" with its business model "and would not be expected to have a negative impact on profitability".
Public outrage over drug costs has been growing for years as Americans face pricing pressure from all sides: New medicines for life-threatening diseases often launch with prices exceeding $100,000 per year. But most Trump's drug price reforms may largely spare the drug industry itself-a possible reason that both S&P and NASDAQ biotech indices rose almost 3% following the address.
PhRMA President and Chief Executive Officer Stephen Ubl said in a statement the association "will be reviewing the request for information and look forward to participating in the comment process in the coming months".
He also said the pharmaceutical industry is making an "absolute fortune" at the expense of American taxpayers.
"This is progress and I think there's no question that opening up the machine to make it more clear how it works will lead to change - hopefully to constructive change", said Dr. Peter Bach, director of Memorial Sloan Kettering's Center for Health Policy and Outcomes. Roughly 30% of the dollar value of prescriptions filled in the U.S.is paid for by Medicare, making the US government the single biggest customer for pharmaceuticals by a wide margin.
The drug industry's top lobbying arm, Pharmaceutical Research and Manufacturers of America, spent almost $26 million to sway federal decision makers past year, according to records tallied by Center for Responsive Politics.
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