Trump tackles drug prices
President says proposal would lower some prices by basing them on other countries’ costs
WASHINGTON » President Donald Trump took his boldest action yet to lower drug prices, saying his administration is moving to stop “global freeloading” by foreign nations when it comes to the price that Americans pay for prescription drugs. The announcement is a sign that the president and his aides are seeking to shift the focus to health care two weeks before the midterm elections.
In a speech Thursday afternoon at the Department of Health and Human Services, Trump said his administration would be taking the “revolutionary” step of allowing Medicare to directly negotiate prices with drug companies that he says have “rigged” the system, causing U. S. patients to pay more for their medicines.
“Americans paymore so other countries can pay less. It’s wrong. It’s unfair,” Trump said.
Trump’s remarks were the first as president at HHS and come at a time when health care is playing a defining role in the campaign as Democrats slam Republicans over whether they support protecting access to health care for people with pre-existing conditions. He argued other countries were being “very disrespectful” by selling their prescription drugs to Americans for higher prices than their own citizens are paying for them.
Under the new approach, the Centers for Medicare and Medicaid Services plans to experiment with a new way of setting prices for most drugs administered through Medicare’s Part B program, which covers all doctor’s visits for seniors and the drugs prescribed to them during their visits.
HHS estimates the new pricing index — which the agency says would apply to 50 percent of the country — would save Medicare $17.2 billion over five years. Medicare now pays the average sales
price of a medicine in the United States, plus an extra fee based on a percentage of that price. Under the newmodel, Medicare would pay fees to doctors that are more closely aligned with what other countries pay.
The proposal is Trump’s boldest action yet to lower drug prices, which the president says has been a key goal of his administration. It suggests a more prominent role for the government in setting drug prices than many Republicans may be comfortable with and is likely to face strong pushback back from the pharmaceutical industry.
It also highlights an increasing push by the president personally and his administration more generally to emphasize health care in the runup to the elections, an issue polls show is top of mind with voters. On Wednesday afternoon, the president signed sweeping legislation to tackle the opioid epidemic and he has tweeted that “all Republicans” will protect people with pre- existing health conditions in response to Democratic charges otherwise.
“It’s hard to take the Trump administration and Republicans seriously about reducing health care costs for seniors two weeks before the election when they have repeatedly advocated for and implemented policies that strip away protections for people with preexisting conditions,” Senate Minority Leader Chuck Schumer, D-N.Y., said in a statement.
On the campaign trail, Democrats have been hammering away at Republicans for their failed attempt last summer to repeal and replace the Affordable Care Act, which enabled those with prior illnesses to receive affordable health care. His administration has worked to chip away at several ACA requirements, including supporting GOP repeal of the individual mandate in the party’s tax overhaul and supporting waivers for Medicaid work requirements.
Trump’s announcement on drug prices came hours after HHS released a report highlighting the steep spending by the U.S. government on prescription drugs.
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. It concludes the higher U. S. prices means Medicare pays nearly twice as much as the program would pay for the same or similar drugs in other countries. During his speech, Trump cited an example of a “common” cancer drug that he says is seven times more expensive for Americans than for those living outside the United States, though he didn’t name the drug specifically.
HHS Secretary Alex Azar criticized a systemin which other countries pay significantly less for drugs than the U. S. government. The United States is the biggest funder of research and de- velopment in the pharmaceutical sector, yet currently lacks the bargaining power to bring prices down — unlike in countries with public health care programs.
“For some drugs we are paying upwards of 300 or 400 percent and in some instances we pay 700 percent more than other countries do,” Azar told reporters after Trump’s address. “President Trump asked us to fix this problemand here’s how we plan to do it.”
The new payment model will affect just drugs purchased and dispensed by doctors themselves under Medicare’s Part B program — not medicines purchased at pharmacies. In the fiveyear experiment, carried out through CMS’ innovation center, prices will be gradually and increasingly pegged to the new international index instead of average U.S. sales price.
President Donald Trump discusses drug prices during a visit to the Department of Health and Human Services in Washington. HHS Secretary Alex Azar is at right.