The Atlanta Journal-Constitution
Drug proposal puts focus on competition
Plan would not allow Medicare to negotiate for lower prices.
WASHINGTON — President Donald Trump’s long-promised plan to bring down drug prices, unveiled Friday, would mostly spare the pharmaceutical industry he previously accused of “getting away with murder.”
Instead he focuses on private competition and more openness to reduce America’s prescription pain.
In Rose Garden remarks at the White House, Trump called his plan the “most sweeping action in history to lower the price of prescription drugs for the American people.” But it does not include his campaign pledge to use the massive buying power of the government’s Medicare program to directly negotiate lower prices for seniors.
That idea has long been supported by Democrats but is a nonstarter for drugmakers and most Republicans in Congress. Democratic Rep. Lloyd Doggett of Texas dismissed Trump’s plan as “a sugar-coated nothing pill.”
Instead, 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 directly stop drugmakers from setting skyhigh initial prices.
Drugmakers generally can charge as much as the mar- ket will bear because the U.S. government doesn’t regulate medicine prices, unlike most other developed countries.
The list of 50 proposals includes:
■ A potential requirement for drugmakers to disclose the cost of their medicines in television advertisements
■ Banning a pharmacist “gag rule,” which prevents druggists from telling customers when they can save money by paying cash instead of using their insurance
■ Speeding up the approval process for over-the-counter medications so people can buy more drugs without prescriptions
■ Consider changes to how Medicare pays for some highpriced drugs administered at doctors’ offices
Those ideas avoid a direct confrontation with the powerful pharmaceutical lobby, but they may also underwhelm Americans seeking relief from escalating prescription costs.
Several consumer groups and Democrats in Congress criticized Trump for not following through on pursuing direct Medicare price negotiations, as he had long promised.
Perhaps the idea under con- sideration that would be most threatening to drugmakers is to give the private health insur- ers who run Medicare plans more negotiating power with them. But administration offi- cials offered few specifics on how that might work.
Pharmaceutical investors and analysts expressed relief after the announcement, and shares of several top drug- makers rose slightly.
“Trump had a choice today: to seek disruptive fundamen- tal reform or to embrace more incremental steps,” wrote Terry Haines, a financial analyst, in an investment note. “Trump chose the incremental over the disruptive.”
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 appoin- tees who have deep ties to the industry. They include Health and Human Services Secre- tary Alex Azar, a former top executive at Eli Lilly and Co., who joined Trump for Friday’s announcement.
Azar and other Trump offi- cials have hinted for weeks that the plan would, in part, “dismantle” the convoluted system of discounts and rebates between drugmak- ers and the health care middle- men as pharmacy known benefit managers. Trump called out those companies early in his speech, but gave no details on what new restrictions or penalties they might face. “We’re very much eliminating the middle men,” Trump said. But Azar later told reporters that the administration would “seek input” on doing away with drug rebates in the Medicare system to encourage more direct discounts. “It took decades to erect this very complex, interwoven system,” Azar said in a briefing following the speech. “I don’t want to overpromise that somehow by Monday there’s going to be a radical change, but there’s a deep commitment to structural change.” 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 percent 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. That’s more than twice the $497 per person spent in the United Kingdom, which has a nationalized health care system.