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WASHINGTON — The White House last month steered clear of extreme measures in issuing a plan to cut drug prices.
While President Donald Trump called the proposal “the most sweeping action in history to lower the price of prescription drugs for the American people,” the plan left industry stakeholders relieved. Pharmaceutical company stocks even gained ground following the proposal’s release.
The “blueprint to lower drug prices and reduce out-of-pocket costs” left out hard-line measures from Trump’s presidential campaign, opting against direct Medicare negotiations with drug makers, or importation of lower-cost medications.
If the blueprint, titled “American Patients First,” was short on tough actions, Trump did not spare harsh rhetoric for “everyone involved in the broken system.” Blame is shared by “drug makers, insurance companies, distributors, pharmacy benefit managers and many others,” he said in a Rose Garden address.
The blueprint includes more than 50 initiatives, though many entail potential future actions as opposed to instant changes. “I don’t want to overpromise that somehow on Monday there’s a radical change,” said Health and Human Services Secretary Alex Azar, who joined the president for the plan’s release. “This is the possible restructuring of a major sector of the economy. One doesn’t do that lightly.”
While not using the government’s buying power in direct negotiations, Trump said the proposal would give new tools to Medicare Part D to lower prices. In a speech a few days after the blueprint’s release, Azar said, “The only way that direct negotiation could possibly save money is by doing something this administration doesn’t believe in: denying access to certain medicines for all Medicare beneficiaries through rationing, or setting prices for drugs by government fiat. We don’t believe either of these proposals would put American patients first. They would move us toward the kind of socialized medicine systems that have such a notorious reputation for poor quality and access.”
The blueprint takes steps to boost rebates and discounts for Medicare enrollees, and provides incentives for pharmaceutical companies to cut prices. “We are not going to reward companies that constantly raise prices, which, in the past, has been most companies,” the president said. “Frankly, Alex used to run one of them,” he said, referring to Azar’s tenure as a president at Eli Lilly and Co., “so nobody knows the system better than Alex. That’s what we needed.”
As well, manufacturers could be required to include list drug prices in direct-to-consumer advertising and pharmacists could be encouraged to tell Medicare enrollees about discounts if they don’t use their insurance.
“Our plan bans the pharmacist gag rule, which punishes pharmacists for telling patients how to save money,” Trump said. “This is a total rip-off, and we are ending it.”
He also said he would endeavor to force foreign governments to pay more for drugs researched and developed in the U.S. The plan calls on agencies like the Commerce Department to address the matter. Also, the Food and Drug Administration will speed the approval process for over-the-counter medications, Trump said, “so that patients can get more medicines without prescription.”
The president was especially scornful of the drug industry’s “middlemen,” who he said would be eliminated. “The middlemen became very, very rich. Right? Whoever those middlemen were — and a lot of people never even figured it out — they’re rich. They won’t be so rich anymore.”
He also reserved contempt for branded drug manufacturers, saying the pharmaceutical sector spent nearly $280 million on lobbyists last year, “more than tobacco, oil, and defense contractors combined.” Health insurers and other providers spent another $200 million “to protect the status quo and to keep prices artificially high,” he said. “And they’ve been very successful doing it for many, many years.”
On the other hand, he singled out generic drug makers for praise, pointing out that more than 1,000 generics were approved in 2017, saving Americans nearly $9 billion.
