Trump Springs Globalist Surprise With Medicare Drug-Pricing Plan

Trump Springs Globalist Surprise With Medicare Drug-Pricing Plan

"We compared the high prices Medicare pays to prices paid by countries with similar economic conditions, to better understand the discounts drug companies voluntarily offer them", HHS Secretary Alex Azar said in a series of tweets.

Five months ago, Trump unveiled a blueprint to address prohibitive drug prices, and his administration has been feverishly rolling out ideas ranging from posting drug prices on television ads to changing the rebates that flow between drugmakers and industry middlemen.

An analysis by HHS of USA and worldwide prices for leading Part B drugs finds that Medicare pays almost twice as much as it would pay for the same or similar drugs in other countries. In multiple midterm races, Republican incumbents have denied claims that they oppose protections for people with preexisting conditions.

In some cases, European patients have to pay the difference between the government's reference price and what the company charges for a drug, said University of York's Moreno-Serra. The administration expects to begin piloting that program in half of the country in late 2019 or early 2020.

Stephen Ubl, president of the industry trade group Pharmaceutical Research and Manufacturers of America, or PhRMA, said imposing foreign price controls from countries with socialized health care systems would harm patients and hinder drug discovery and development.

The push comes less than two weeks ahead of the midterm elections in which Democrats are striving to flip the House, Senate and several governor seats.

Unsurprisingly, the plan was met with immediate opposition from the pharmaceutical and biotech industries, which attacked the proposed changes to Part B as importing "foreign price controls". In the US, large swaths of the poor and uninsured can be left out.

Drug industry lobby the Pharmaceutical Research and Manufacturers of America, or PhRMA, quickly criticized the proposal in a statement that appeared to be meant as a dig at universal healthcare - something that a growing number of political leaders have proposed for the USA - in addition to defending the United States pricing system.

And drug companies are not going to "walk away" from the world's largest payer for prescription drugs, Azar argued. Nothing special, just the prices that other countries pay. "We're fixing it. That's called real-life experience, I guess", Trump added. In the five-year experiment, carried out through CMS's innovation center, prices will be gradually and increasingly pegged to the new worldwide index instead of average US sales price. Medicare now isn't allowed to directly negotiate with drugmakers on prices - it reimburses doctors for the purchase price of the medicine plus 6 percent. It could also lower some of seniors' out-of-pocket costs, which are based on the total price paid by Medicare for a given drug. In contrast, Part D spending on drugs has risen much more slowly. The list includes many cancer drugs.

The report "provides troubling insight into how the current global drug pricing system has put America in last place, " Azar tweeted.

The 19-page report looks specifically at drugs purchased and dispensed by doctors themselves under Medicare's Part B program. Among biotechs, Amgen and Regeneron earn a substantial portion of their revenue through Medicare Part B.

"Something has to change in how Medicare pays for physician-administered drugs", Azar said at the Brookings Institution think tank in Washington. In a March Kaiser Family Foundation poll, eight in 10 respondents said drug costs are unreasonable and 92 percent said passing legislation to bring down the cost of prescription drugs should be a top or important priority. But it's largely been business as usual for drugmakers even as Trump has predicted "massive" voluntary price cuts.

While Trump did not specifically name the drug, he was presumably referring to Roche's biologic Lucentis (ranibizumab) by comparing the numbers he cited with figures in the HHS report released earlier Thursday. If a patient needs a specific drug, they need a specific drug; knowing the drug's price changes nothing about their material circumstance. Trump signed a bill banning so-called "gag clauses" that prohibited pharmacists from telling patients when they could save money by paying cash or trying a cheaper alternative medicine.

Allan Coukell, senior director for health programs at Pew Charitable Trusts, said removing incentives that reward doctors for purchasing costlier drugs and bringing in a new way to control prices "makes a lot of sense".

This article was written by Felicia Sonmez and Paige Winfield Cunningham, reporters for The Washington Post.

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