President Trump promises cheaper prescription drugs
May 12 2018
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.
"Let's assume all of the other countries in the world agreed to pay the same price we do-that doesn't guarantee or assure us that the drug company would lower the price in the USA", saidStephen Shondelmeyer, head of the Department of Pharmaceutical Care and Health Systems at the University of Minnesota.
In the U.S., Medicare is the largest purchaser of prescription drugs, covering 60 million seniors and Americans with disabilities, but it is barred by law from directly negotiating lower prices with drugmakers. But the costs of R&D actually don't explain the elevated price of US drugs compared with the rest of the world.
Instead, the administration plans to pursue a raft of old and new measures meant to improve competition and transparency in the notoriously complex drug pricing system. Democratic Rep. Lloyd Doggett of Texas dismissed Trump's plan as "a sugar-coated nothing pill".
- Reconsidering how Medicare pays for some high-priced drugs administered at doctors' offices.
"We commend President Trump and his administration for their focus on this essential issue", America's Health Insurance Plans (AHIP), a lobbying group for the health insurance industry, said in a statement.
He also said the pharmaceutical industry is making an "absolute fortune" at the expense of American taxpayers.
AHIP cited one proposal, to require Medicare Part D prescription drug plans to pass on the savings from drug manufacturer rebates at the pharmacy counter, as an example of a proposal that could backfire.
The US Food and Drug Administration would evaluate requiring drug makers to include the list prices they set on medicines in their advertising.
Health care stocks were volatile during Trump's speech, with shares of companies involved in the pharmaceutical supply chain, such as Express Scripts Holding Co and CVS Health Corp, hitting session lows. He gave no timeframe for more concrete steps. Back in September of 2015, specialists involved in infectious disease protested the very big overnight increase in the price of the over 60-year-old drug that is commonly used for treating a life-threatening parasitic infection.
By the numbers, the average person in the USA pays about $1,000 a year for prescription drugs.
Indeed, despite Trump's consistent rhetoric about pharmaceutical companies "getting away with murder", the administration hasn't taken action on drugmakers, which have so far largely benefited from his administration. Healthcare investors had braced for months for more direct attempts to regulate US prices that would cut into industry profits.
"It's hard to know why Germany or France of Australia would agree to something like that", said Professor Jack Hoadley of Georgetown University's Health Policy Institute.
The pharmaceutical industry has spent heavily this year on lobbying the federal government, perhaps with Trump's twice-delayed drug pricing plan in mind.
The president has faced mounting pressure to confront the skyrocketing price of prescription drugs, which have become a key driver of rising health care costs and a major complaint for millions of American patients.