Why Trump's plan will not cut drug prices

Lester Mason
May 18, 2018

Health and Human Services Secretary Alex Azar talked Friday about the administration's plans to lower drug prices as President Trump looked on in the White House Rose Garden. It should stay focused on who matters most: the American patient. Extra innovation is welcome but, unless America gets a grip on prices at the same time, it will lead to yet more costly new drugs offering poor clinical value.

So far, investors in the pharmaceutical industry seem unfazed. "Trump chose the incremental over the disruptive".

That is because the price of drugs in America would remain at what the market will bear.

Before the announcement, industry experts said they expected the plan to have little impact on pharmaceutical companies.

Instead, the administration is proposing a "competitive acquisition program" for Part B drugs."The concept of the competitive acquisition program is not to have physicians take title to the medications they're administering, but rather, have a competitive program where those drugs would be purchased and the capital outlay would occur elsewhere", so the doctor doesn't have to buy the drug "and the physician is paid. a fair, appropriate level of reimbursement for their services in administering the drug", Azar said. "It took decades to erect this very complex, interwoven system", Azar said in a briefing following the speech.

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. "I can tell you I wouldn't have wanted to be the one to do that", he said. And older drugs for common ailments like diabetes and asthma routinely see price hikes around 10 percent annually.

Azar's most ambitious initiative would ban pharmacy benefit managers - the companies that administer prescription drug plans for insurance companies or employers - from negotiating discounts with drugmakers as a percentage of list prices. That's more than twice the $497 per person spent in the United Kingdom, which has a nationalized health care system.

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And on top of that, Azar says he is looking at whether he can require drug companies to include the price of their products in those television ads that already include seemingly endless lists of scary side effects. The government could give Medicare, the health scheme for the elderly, more power to negotiate prices and more freedom to determine the drugs it has to provide by law.

Mitchell and Levitt both doubt that drug companies can be shamed into lowering prices and losing profit.

"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.

Mr Trump also repeated an argument beloved of pharmaceutical companies-that foreigners are to blame for America's high prescription-drug prices.

The drug industry's top lobbying arm, Pharmaceutical Research and Manufacturers of America, spent almost $26 million to sway federal decision makers a year ago, according to records tallied by Center for Responsive Politics.

The group's chief executive, Stephen Ubl, said in a statement that some Trump proposals could help patients afford their medicines, but "others would disrupt coverage and limit patients' access to innovative treatments".


Other reports by Iphone Fresh

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