“Everyone involved in the broken system – the drugmakers, insurance companies, distributors, pharmacy benefit managers and many others – contribute to the problem” said Trump in the Rose Garden.
The administration released a 44-page blueprint of the plan, entitled American Patients First.
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
Unlike Trump’s 2019 budget proposal, the majority of the actions don’t need Congress’ approval, senior administration officials said. Nowhere to be seen were the popular and populist proposals of his presidential campaign, such as to have the federal government directly negotiate lower drug prices for Medicare. Also missing is the option to permit American consumers to import low-cost medicines from abroad.
Under the plan, his administration would give new powers to Medicare’s private prescription drug plans, Part D, to negotiate lower prices but he would not use the purchasing power of the federal government to conduct direct negotiations. He said he would make it easier for pharmacists to tell patients of cheaper alternatives and would speed the approval of over-the-counter drugs “so that patients can get more medicines without prescription.”
The secretary of health and human services, Alex Azar said the Food and Drug Administration would explore requiring drug companies to disclose list prices in their television advertisements.
The government, he said, will consider whether to “outlaw rebates” — the discounts and price concessions that are a key link in the drug supply chain. He went on to say the administration has 50 relevant policy proposals in the works, though some are being implemented as immediate actions while others are under consideration and headed for a public comment period.
There are not a lot of specifics to examine. Nothing seemed to scare the industry he reviled. The New York Times quoted Ronny Gal, a securities analyst at Sanford C. Bernstein & Company, as saying 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.
Share prices of several major drug and biotech companies rose immediately after the speech, as did the stocks of pharmacy benefit managers. The Nasdaq Biotechnology Index rose 2.7 percent on Friday. CVS Health, which manages pharmacy benefits for many insurers and employers, finished up 3.2 percent.
Read reactions from industry associations, consumer advocates and Congressional Democrats in The New York Times.
CNN Money reports the Centers for Medicare & Medicaid Services spent $174 billion on prescription medications in 2016, or 23% of its total budget. That represents an increase from $109 billion, or 17% of the budget, in 2012.