President Trump blames high cost of drugs on 'freeloading' countries

Lynette PayneOct 29, 2018

2018 is the health-care midterm for a reason: Donald Trump and the rest of his party spent the last two years trying to advance policies that would deprive the most vulnerable Americans of access to health care.

Currently, doctors and hospitals administering Part B drugs are reimbursed the average price of a drug plus 6 percent.

"We are taking aim at the global freeloading that forces American consumers to subsidize lower prices in foreign countries through higher prices in our country", Trump said in a speech Thursday at the Department of Health and Human Services.

Rather than "divine the value" of a drug, the proposal "respects the fact that pharma voluntarily agreed to sell drugs at discounts elsewhere and we're saying 'give us some of that, '" Azar said at a briefing with reporters after Trump's speech.

"Same company. Same box".

Despite Medicare being one of the world's largest drug purchasers, prices in the USA were 1.8 times higher compared to the other economies.

Many large pharmas have limited exposure to Part B, which encompasses drugs administered in doctor's offices or hospital outpatient clinics. "The United States has a competitive marketplace that controls costs and provides patients with access to innovative medicines far earlier than in countries with price controls, and it's why we lead the world in drug discovery and development".

- Don't expect immediate rollbacks.

And it would take more than a year to put into effect.

Also, Trump's Justice Department is seeking to invalidate the health reform law's provisions governing pre-existing conditions as part of lawsuit being brought by 20 Republican states.

"This happens because the government pays whatever price the drug companies set, without any negotiation whatsoever", Trump said in his announcement. It suggests a more prominent role for the government in setting drug prices than many Republicans may be comfortable with and is likely to face strong pushback back from the pharmaceutical industry.

Health care is high among voters' election-year concerns. In his remarks Thursday, he combined that with a swipe at foreign trade practices, framing the Medicare proposal as a way to restore fairness for American healthcare consumers.

Under the proposed rule, the government would create an "international pricing index" to help Medicare pay prescription drug prices that are more closely aligned with those of other countries. The proposal won't extend into other common drugs Americans pick up at the pharmacy counter. But that's "quite literally the opposite of what is being proposed". The United States is the biggest funder of research and development in the pharmaceutical sector, yet now lacks the bargaining power to bring prices down - unlike in countries with public health-care programs.

Democratic leaders on Capitol Hill were dismissive. If you're upset about high drug prices, blame America's commitment to a relatively unrestrained free market, not, say, the policies of the United Kingdom.

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.

Trump's administration plans to set up an "international pricing index", in which some USA drug prices would be linked to what 16 other countries pay, ultimately to get to a lower price in line with what those countries are paying, Politico reports.

But that's not how HHS Secretary Alex Azar tells the story.

Before that visit, the department released a report that finds US prices for the top drugs administered in doctor's offices are almost twice as high as in foreign countries.

"The proposed Medicare Part B model would jeopardize access to medicines for seniors and patients with disabilities living with devastating conditions such as cancer, rheumatoid arthritis and other autoimmune diseases..."

Introduce competition to the system of paying for physician-administered drugs by bringing in private-sector vendors.

HHS says overall savings to Medicare would total $17.2 billion over five years. However, HHS officials said the plan is designed so it would not cut into doctors' reimbursements.

Trump's argument is that pharma companies use the higher prices from the United States to fund new research and development that other countries then receive, effectively benefitting from the highers costs for United States patients.

Trump, too, promised more to come and said he will soon announce "some things that will really be tremendous".

Trump has harshly criticized the pharmaceutical industry, once asserting that the companies were "getting away with murder", a comment that sent pharmaceutical stocks tumbling. But it's largely been business as usual for drugmakers even as Trump has predicted "massive" voluntary price cuts. The analysis found 96 price hikes for every price cut.

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