TrumpвЂ™s prescription to reduce drug prices takes small steps
WASHINGTON вЂ” President Donald TrumpвЂ™s long-promised plan to bring down drug prices would mostly spare the pharmaceutical industry he previously accused of вЂњgetting away with murder.вЂќ Instead he focuses on private competition and more openness to reduce AmericaвЂ™s prescription pain.
In Rose Garden remarks at the White House Friday, Trump called his plan the вЂњmost sweeping action in history to lower the price of prescription drugs for the American people.вЂќ But it does not include his campaign pledge to use the massive buying power of the governmentвЂ™s Medicare program to directly negotiate lower prices for seniors.
That idea has long been supported by Democrats but is a non-starter for drugmakers and most Republicans in Congress. Democratic Rep. Lloyd Doggett of Texas dismissed TrumpвЂ™s plan as вЂњa sugar-coated nothing pill.вЂќ
The administration will pursue a raft of old and new measures intended to improve competition and transparency in the notoriously complex drug pricing system. But most of the measures could take months or years to implement, and none would stop drugmakers from setting sky-high initial prices.
вЂњThere are some things in this set of proposals that can move us in the direction of lower prices for some people,вЂќ said David Mitchell, founder of Patients for Affordable Drugs. вЂњAt the same time, it is not clear at all how they are going to lower list prices.вЂќ
Drugmakers generally can charge as much as the market will bear because the U.S. government doesnвЂ™t regulate medicine prices, unlike most other developed countries.
TrumpвЂ™s list of 50 proposals, dubbed American Patients First, includes:
вЂ” A potential requirement for drugmakers to disclose the cost of their medicines in television advertisements.
вЂ” Banning a pharmacist вЂњgag rule,вЂќ which prevents druggists from telling customers when they can save money by paying cash instead of using their insurance.
вЂ” Speeding up the approval process for over-the-counter medications so people can buy more drugs without prescriptions.
вЂ” Reconsidering how Medicare pays for some high-priced drugs administered at doctorsвЂ™ offices.
Those ideas avoid a direct confrontation with the powerful pharmaceutical lobby, but they may also underwhelm Americans seeking relief from escalating prescription costs.
Democrats pounced on Trump for not pursuing direct Medicare negotiations, an idea he championed before reaching the White House.
вЂњThis weak plan abandons the millions of hard-working families struggling with the crisis of surging drug prices,вЂќ said Democratic Leader Nancy Pelosi, in a statement.
Pharmaceutical investors and analysts expressed relief after the announcement, and shares of most top drugmakers rose Friday afternoon, including Pfizer, Johnson & Johnson and Eli Lilly.
вЂњTrump had a choice today: to seek disruptive fundamental reform or to embrace more incremental steps,вЂќ wrote Terry Haines, a financial analyst, in an investment note. вЂњTrump chose the incremental over the disruptive.вЂќ
Some parts of the plan were previously proposed in the presidentвЂ™s budget proposal sent to Congress, including providing free generic drugs to low-income seniors and sharing rebates from drugmakers with Medicare patients. Other parts could be implemented directly by the administration.
A majority of Americans say passing laws to bring down prescription drug prices should be a top priority for Trump and Congress, according to recent polling by the Kaiser Family Foundation.
As a candidate, Trump railed against the pharmaceutical industry. But as president he has shied away from major changes and has staffed his administration with appointees who have deep ties to the industry. They include Health Secretary Alex Azar, a former top executive at Eli Lilly and Co., who joined Trump for FridayвЂ™s announcement.
Azar and other Trump officials have hinted for weeks that the plan would, in part, вЂњdismantleвЂќ the convoluted system of rebates between drugmakers and the health care middlemen known as pharmacy benefit managers, which negotiate price concessions for insurers, employers and other large customers.
Trump called out those companies in his speech: вЂњOur plan will end the dishonest double-dealing that allows the middleman to pocket rebates and discounts that should be passed onto consumers and patients,вЂќ Trump said.
Azar later told reporters that the administration would вЂњseek inputвЂќ on doing away with drug rebates in the Medicare system to encourage more direct discounts. He gave no timeframe for more concrete steps.
вЂњIt took decades to erect this very complex, interwoven system,вЂќ Azar said in a briefing following the speech. вЂњI donвЂ™t want to overpromise that somehow by Monday thereвЂ™s going to be a radical change, but thereвЂ™s a deep commitment to structural change.вЂќ
Public outrage over drug costs has been growing for years as Americans face pricing pressure from multiple sources: New medicines for life-threatening diseases often launch with prices exceeding $100,000 per year. And older drugs for common ailments like diabetes and asthma routinely see price hikes around 10 per cent annually. Meanwhile Americans are paying more at the pharmacy counter due to health insurance plans that require them to shoulder more of their prescription costs.
America has the highest drug prices in the world.
The U.S. spent $1,162 per person on prescription drugs in 2015, according to the Organization for Economic Cooperation and Development. ThatвЂ™s more than twice the $497 per person spent in the United Kingdom, which has a nationalized health care system.
TrumpвЂ™s speech singled out foreign governments that вЂњextort unreasonably low prices from U.S. drugmakersвЂќ using price controls and said U.S. trade representatives would prioritize the issue in trade deals.
But experts are skeptical the U.S. can pressure foreign governments to pay more for drugs.
вЂњItвЂ™s hard to know why Germany or France or Australia would agree to something like that,вЂќ said Professor Jack Hoadley of Georgetown UniversityвЂ™s Health Policy Institute.
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.
Allowing Medicare to negotiate prices is unacceptable to the powerful drug lobby, which has spent tens of millions of dollars since TrumpвЂ™s inauguration to influence the Washington conversation around drug prices, including a high-profile TV advertising campaign portraying its scientists as medical trailblazers.
The drug industryвЂ™s top lobbying arm, Pharmaceutical Research and Manufacturers of America, spent nearly $26 million to sway federal decision makers last year, according to records tallied by Center for Responsive Politics. The annual total was the groupвЂ™s highest since the 2009 congressional fight that led to Obamacare.
The groupвЂ™s chief executive, Stephen Ubl, said in a statement that some Trump proposals could help patients afford their medicines, but вЂњothers would disrupt coverage and limit patientsвЂ™ access to innovative treatments.вЂќ
Associated Press writers Ken Thomas, Catherine Lucey, Tom Murphy and Linda A. Johnson contributed to this report.
Matthew Perrone can be followed on Twitter: @APвЂ“FDAwriter