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President Trump Outlines Plan To Lower Drug Pricing

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Trump Outlines Plan to Lower Drug Prices

President Trump vowed on Friday to “derail the gravy train for special interests” as he outlined a strategy intended to lower the cost of prescription drugs by promoting tougher negotiation, more competition and measures to stop foreign countries from taking advantage of American industry.

Mr. Trump said the current system has been corrupted by greedy businesses and middlemen who have made “an absolute fortune” through “dishonest double-dealing” at the expense of consumers who need medicine to extend or improve their lives.

“Everyone involved in the broken system — the drug makers, insurance companies, distributors, pharmacy benefit managers and many others — contribute to the problem,” he said in a speech in the Rose Garden. “Government has also been part of the problem because previous leaders turned a blind eye to this incredible abuse. But under this administration we are putting American patients first.”

Mr. Trump’s plan, however, is a break from what he promised on the campaign trail. It does not authorize the government to use its huge purchasing power to obtain lower prices by negotiating directly with drug manufacturers. Nor does it expand the ability of American consumers to import low-cost prescriptions from abroad.

On Friday, Mr. Trump laid out a different approach, saying his administration would cut out the middleman, provide new tools to Medicare to negotiate lower prices, stop limiting pharmacists from helping patients save money and speed up approval of over-the-counter medicines so that fewer will require prescriptions.

He also directed his trade representative to make it a priority to stop foreign countries from forcing American drug makers to provide medicines at drastically lower prices than in the United States. “It’s time to end the global freeloading once and for all,” Mr. Trump said.

Mr. Trump’s plan includes ideas that experts say could help lower drug prices.

“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,” said Daniel N. Mendelson, the president of Avalere Health, a research and consulting company. “The trick here for the administration is to do something visible before the midterm elections, so they can take credit for an action that reduces drug prices for consumers.”

Republicans are eager to show an achievement on health care this year to counter arguments by Democrats who say that Americans are losing coverage because of Mr. Trump’s efforts to sabotage the Affordable Care Act.

Mr. Trump’s “blueprint to lower drug prices” has four main themes: increasing competition in drug markets; giving private plans more tools to negotiate discounts for Medicare beneficiaries; providing new incentives for drug manufacturers to reduce list prices; and cutting consumers’ out-of-pocket costs.

The administration would lower out-of-pocket costs for Medicare patients by requiring prescription drug plans to pass on some of the discounts and rebates they receive from drug manufacturers. Patients could see savings at the pharmacy counter. At the same time, Medicare officials say, there could be a modest increase in premiums for Medicare drug coverage.

Health policy experts like this idea because it reduces the burden on patients with serious chronic illnesses and spreads the expense of needed medications across the entire insured population.

But Democrats say Mr. Trump’s policy prescriptions fall far short of what is needed, especially next to the populist promises he made in the 2016 campaign.

“I think very expensive champagne will be popping in drug company boardrooms across the country tonight,” said Representative Elijah E. Cummings, Democrat of Maryland, who has been investigating drug prices for the last year. “The president is apparently abandoning his campaign promise to authorize Medicare to negotiate directly with drug companies to lower prices.”

Administration officials were somewhat defensive about the president’s plan, saying it was bold and significant even though it was not what Democrats wanted — or what candidate Trump embraced.

In a round of television interviews on Friday morning, Alex M. Azar II, the secretary of health and human services, said the president’s plan included “over 50 different initiatives — very sophisticated, the kind of thing you’d expect from a C.E.O. like Donald Trump, getting at the real heart of the business problem.”

Mr. Azar said on the Fox Business Network that the president’s plan would “unleash those who negotiate for us with the greater powers of the private sector” to obtain good deals.

In trade negotiations, the White House wants to put pressure on other countries to increase the prices of brand-name drugs, with the expectation that pharmaceutical companies would then lower prices here at home.

America’s trading partners “need to pay more because they’re using socialist price controls, market access controls, to get unfair pricing,” said Mr. Azar, a former top executive at the drugmaker Eli Lilly and Company. “And they’re doing it on the backs of their patients. God help you if you get cancer in some of these countries.”

Other nations, also struggling with high drug prices, scorned Mr. Trump’s advice on this issue.

“Drug manufacturers in the United States set their own prices, and that is not the norm elsewhere in the world,” a spokesman for the 28-member European Union said on Friday. “E.U. member states have government entities that either negotiate drug prices or decide not to cover drugs whose prices they deem excessive. No similar negotiating happens in the U.S.”

Dr. Mitchell Levine, the chairman of Canada’s Patented Medicine Prices Review Board, which reviews prices to ensure they are not excessive, said in an interview, “With our price regulations, drug companies are still making profits — just lower profits than in the United States.”

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[1]   The New York Times; Trump Outlines Plan to Lower Drug Prices, Robert Pear and Peter Baker, May 11, 2018.

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