Trump administration squares off with drugmakers over plan
- Eloise Marshall
Amgen, Regeneron, Roche and Bristol-Myers Squibb are among the pharmaceutical companies with the most at stake over payment changes in Part B, which represented about 8% of overall US drug spending in 2016.
The world reaps the benefits of American genius and innovation, while Americans pick up the tab, President Donald Trump said Thursday as he announced new measures to lower the drug prices in the country, which he said are higher in the U.S. and lower in other parts of the world.
President Donald Trump tried Thursday to make good on a campaign vow to lower drug prices - attacking "foreign freeloaders" and proposing significant changes to how Medicare pays for many drugs. "The administration is imposing price controls from countries with socialized health care systems that deny their citizens access and discourage innovation", PhRMA President Stephen Ubl wrote.
"The world reaps the benefit of American genius", Trump said, speaking at the Department of Health and Human Services' (HHS) Humphrey Building near Capitol Hill.
HHS today released a study of 27 drugs that are usually paid for by Medicare Part B that showed that on average the USA pays 80 percent more than the average prices in other countries. "It's not surprising. I've seen trade deals where it's far more costly to us than even this, and we're changing them, also", Trump said.
The HHS is asking for feedback on the index before it plans to propose it as a rule in early 2019, and it would go into effect in 2020.
President Trump's forthcoming proposal to lower the cost of expensive physician-administered drugs will hit three drug companies - Amgen, Genentech, and Regeneron - harder than anyone else.
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The speech also comes at an interesting time given the proximity to the midterm elections.
The proposal focuses on drugs covered under Medicare Part B, which are administered in hospitals, clinics and doctors' offices.
Many governments use similar benchmarks to decide how much to pay for drugs, according to Moreno-Serra.
The announcement, which Trump teased at a Wisconsin rally late Wednesday - "very soon, drug prices will go plunging downward" - came as the President is working to mobilize his loyal Republican base ahead of the midterms by revisiting his 2016 promises to un-rig the United States economy. Those are the same initiatives he's recently slammed as "freeloading".
"We're taking aim at the global freeloading that forces American consumers to subsidize lower prices in foreign countries through higher prices in our country", Trump said in a speech at the Department of Health and Human Services.
Having companies known as pharmacy-benefit managers negotiate for lower drug prices in the way they now do in Part D plans, which cover the prescription drugs you pick up at a pharmacy. Today, Medicare reimburses doctors and hospitals the average sales prices of the drugs, plus 6 percent to cover the cost of giving medications to patients.
The report compares the price paid by Medicare for 27 prescription drugs with the average price paid for the same drugs by countries with similar economic conditions. The changes would only apply to some drugs in Medicare's outpatient program known as Part B, and not the most commonly used medicines sold at pharmacies.
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Azar Tweeted that Medicare spends $8.1 billion more a year than if USA prices were in line with prices elsewhere. "It really changes business as usual for a lot of institutions that make money off of high prices of drugs". The approach bears some similarities to price negotiations by government healthcare programs in European countries like the UK.
In addition to trying to cut the base price of the drugs, the administration, through HHS, is proposing changing how doctors who deliver these drugs are paid.
"You can look at some of the countries; their medicine is a tiny fraction of what the medicine costs in the USA". "It's time to end theglobalfreeloadingonce and for all". "What is being proposed is that we freeload off of other countries' ability to negotiate more effectively". But instead of pushing other countries away from the practice, Trump seems to be moving closer to their system. In contrast, Part D spending on drugs has risen much more slowly.
"This is the first time a United States administration appears to have taken a real step in their direction (how committed they are, we will see)", Bernstein analyst Ronny Gal said in a note Thursday ahead of the speech.
"The reality is he could very easily not take this on and do what other administrations have done and let the prices keep rising".
Trump has long promised sweeping action to attack drug prices, and health care is high among voters' concerns ahead of the November 6 elections.
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