Published: Tue, May 15, 2018
Worldwide | By Isabel Fisher

Secretary Azar's Remarks on the Trump Administration's Drug Pricing Blueprint

Secretary Azar's Remarks on the Trump Administration's Drug Pricing Blueprint

Azar said that importing drugs from overseas was a gimmick because there was no way to ensure the drugs weren't counterfeit and "Canada's drug market is simply too small to bring down prices here".

The administration also released a 44-page blueprint of the plan, entitled American Patients First. Rather than importing foreign drugs, Trump wants other countries to pay more for drugs so Americans bear less of the cost.

Trump and Department of Health and Human Services (HHS) Secretary Alex Azar laid out the main planks of the drug pricing blueprint in a White House Rose Garden address.

Unlike Trump's fiscal 2019 budget proposal, the majority of the actions don't need Congress' approval, senior administration officials said.

Most of Trump's proposals in Friday speech focused on the middlemen who negotiate drug costs on behalf of insurance companies.

Trump in his speech hit out at foreign governments alleging free-riding off of American investment in innovation.

"In some cases, medicine that costs a few dollars in a foreign country costs hundreds of dollars in America for the same pill, with the same ingredients, in the same packaging, made in the same plant", Trump said. Trump sates that the Administration will no longer tolerate this type of game-playing, which has allowed for "unfair monopolies".

But consumer groups generally found little in the president's blueprint that would lead to price rollbacks. But he was otherwise harsh on one type of these middlemen, the pharmacy benefit managers that now negotiate the discounts for Medicare Part D plans. Others, including those representing insurers, physicians, pharmacists and hospitals, blamed drugmakers for the problem.

"These are sophisticated drugs for complicated diseases", Antos said.


"Instead of standing up to the power of the drug companies, who have spent almost $4 billion on lobbying and campaign contributions since 1998, Trump has become a cheerleader for them", Sanders said.

PBMs have come under increasing scrutiny since the president's economic advisory council issued a February report that highlighted their dominance in senior healthcare settings.

Azar said that there would be a close look at the current drug rebating system involving pharmacy benefit managers (PBMs), manufacturers, and health plans and how rebates affect PBM compensation.

"It took decades to erect this very complex, interwoven system", Azar said in a briefing following the speech. For instance, will PBMs be forced to share more of the rebates they negotiate with drug makers (a largely opaque process that many critics say is lifting up prices) directly with consumers?

Removing the middlemen: The Trump administration will work on eliminating the middlemen from the business. "It was simply an off-the-top reimbursement change; it was not actually changing what the drug companies get paid and creating negotiation against drug companies to get the kind of 30%-plus discounts we get in Part D". The agency also want feedback on whether 340B's growth has raised list prices in the commercial market and ultimately affected payers, including Part D plans. This also gives manufactures the incentive to raise prices and gives providers the incentive to select more expensive medicines. Instead, the administration plans to move high-cost drugs into the Medicare Part D program. Pharmaceutical ads will also be expected to list out the cost of their drugs in future. But there are big, they are bold steps.

The Part D program now spends about $30 billion a year on the protected drugs, which include antiretrovirals, immunosuppressants, antidepressants, antipsychotics, anticonvulsant agents and antineoplastics. All the sequester cut to Medicare drug payments for cancer drugs has produced is less access to cancer treatment, higher costs for patients and Medicare, and increased drug prices.

After months of expectations and repeated delays, President Donald Trump formally announced his strategy for making prescription medicines more affordable and accessible in the United States.

"It's hard to know why Germany or France or Australia would agree to something like that", said Professor Jack Hoadley of Georgetown University's Health Policy Institute.

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