Trump unveils prescription drugs plan

President Donald Trump speaks during a roundtable discussion on tax reform at the Cleveland Public Auditorium in Cleveland Ohio U.S. May
President Donald Trump speaks during a roundtable discussion on tax reform at the Cleveland Public Auditorium in Cleveland Ohio U.S. May

12 May, 2018

Trump's Plan Includes Plenty of Steps He Can Take Without Congress: "It's framed as a pro-competitive agenda, and touches on a range of government programs that the administration can change through regulation - so that the president can take unilateral action", Daniel N. Mendelson, the president of research consultancy Avalere Health, told The New York Times.

Trump called his plan the "most sweeping action in history to lower the price of prescription drugs for the American people" in remarks in the White House's Rose Garden. The administration's written proposal is more vague, saying that it "may" prohibit these gag clauses in plans for Part D, the Medicare drug program.

The administration will pursue a variety of old and new measures, but a lot of them could take months or years to implement, and none would stop drugmakers from setting sky-high initial prices. And in a new poll released Thursday by the Kaiser Family Foundation, 66 percent of Republicans, 72 percent of independents and 78 percent of Democrats said they would be more likely to vote for a candidate vowing to lower prescription drug costs.

Drugmakers generally can charge as much as the market will bear because the USA government doesn't regulate medicine prices, unlike most other countries. These proposals include targeting the secretive pricing rebate deals between drug makers and pharmacy benefit managers (PBMs), and addressing the "global freeloading" where foreign countries pay less for USA -made drugs.

Azar also said the FDA would "immediately" look into requiring drugmakers to disclose prices in their ads, although the details are unclear.

Along with the speech will be an outline of what the administration plans to do about them, as well as highlighting budget proposals that would make changes to how drugs are paid for under Medicare, which insures Americans who are 65 and older.

Trump's approach that avoids a direct confrontation with the powerful pharmaceutical lobby, but it could also underwhelm Americans seeking relief from escalating prescription costs.

Trump did call for improving Medicare's negotiating powers.

One question raised by the plan, for instance, asks whether PBMs should have a fiduciary duty to act exclusively in the interest of whoever they are managing benefits for, soliciting input on how this might impact PBMs' ability to negotiate drug prices. But it does not include his campaign pledge to use the massive buying power of the government's Medicare program to directly negotiate lower prices for seniors. Other parts could be implemented directly by the administration.

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But the White House plan largely drops some of the most aggressive, populist attacks Trump proposed on the campaign trail, mostly sparing the pharmaceutical industry he previously accused of "getting away with murder". But administration officials offered few specifics on how that might work.

"Finally, as we demand fairness for American patients at home, we will also demand fairness overseas", Mr. Trump said. While this seems very modest, it should be noted that the list prices (brand prices) grew much faster leading to American patients paying more money out of the pocket for brand drugs.

Some more substantive changes are contemplated by the blueprint, although the document didn't lay out any concrete steps for how to achieve them.

The agency said it is adopting policies "to reduce gaming of statutory and regulatory requirements to help ensure that drug companies don't use anticompetitive strategies to delay development and approval of important generic drugs". "I don't want to overpromise that somehow by Monday there's going to be a radical change, but there's a deep commitment to structural change". While overall drug spending has slowed over the past two years, it still makes up a large share of healthcare expenditures, about 10% in 2016, fueled by the rising price of specialty drugs. Would the drug's price similarly fade into the background? Site neutrality rules could also eliminate differences in inpatient and outpatient Medicare payment policies for drugs.

In countries with centralized health care systems, including Canada, the United Kingdom, Japan and most nations in the European Union, a single entity negotiates on behalf of all the country's residents.

But Big Pharma Should Still Be On Notice: "The industry is among the most profitable of any industry in the US and as such probably has room to give", Wells Fargo analyst David Maris told Bloomberg.

One big idea not included in the blueprint is a call for the federal government to have Medicare negotiate drug prices.

"It's hard to know why Germany or France or Australia would agree to something like that", said Professor Jack Hoadley of Georgetown University's Health Policy Institute.

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