Trump announces drug price strategy
Trump plan lacks populist pledges of his campaign
The president vowed to “derail the gravy train for special interests” by promoting competition and pressing foreign nations to raise their drug prices.
WASHINGTON — President Donald Trump vowed Friday to “derail the gravy train for special interests” as he outlined what he called a comprehensive strategy to lower the cost of prescription drugs by promoting competition and pressing foreign nations to raise their drug prices to alleviate pressure on U.S. consumers.
But he dropped the popular and populist proposals of his presidential campaign, opting not to have the federal government negotiate lower drug prices for Medicare or allow American consumers to import low-cost prescriptions from abroad.
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.
But his proposals hardly put a scare into that system. Ronny Gal, a securities analyst at Sanford C. Bernstein & Co., said the president’s speech was “very, very positive to pharma,” and he added, “We have not seen anything about that speech which should concern investors” in the pharmaceutical industry.
Drugmakers’ stocks jumped immediately after the speech, as did the stocks of pharmacy benefit managers, the “middlemen” who Trump said had gotten “very, very rich.”
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.