White House Looking at Significant Drug Price Cuts
Citing information from industry sources, multiple media outlets are reporting that the Trump administration is looking at ways to lower prices for almost all prescription drugs sold to Medicare and other government programs by tying prices the programs would pay to lower prices in other countries. Reuters says White House officials declined to comment on the proposal and it wasn’t clear how close any such plan is to being enacted. HHS also declined to comment. Unlike an earlier proposal that involved drugs provided under Medicare Part B, this plan reportedly would affect drugs provided under Medicare Part D, the part that covers almost all prescription drugs taken at home.
“Executive orders often go through various drafts and incarnations, and sometimes competing versions of the same order are floated within the Trump White House,” the news service reports. “In addition, some executive orders do not end up being signed.”
However, sources told Reuters the drug pricing executive order could come as soon as the next few weeks.
The sources also indicated the White House might wait on its executive order if the bill introduced this week by Sens. Grassley and Wyden looked likely to get bipartisan support.
Earlier this month, the president said he was working on a drug pricing executive order with “a favored-nation clause, where we pay whatever the lowest nation’s price is.” Also, earlier this month, the administration scrapped a policy to require health insurers to pass billions of dollars in rebates they receive from drug companies on to Medicare patients. And a federal judge struck down an administration rule that would have forced drug companies to include the wholesale price of drugs in direct-to-consumer TV ads for the drugs.
The Hill says that health industry experts caution there are critical differences between the foreign and U.S. markets that could complicated comparisons. The story reports that the U.S. spent $1,011 per person on drugs in 2015, according to the Commonwealth Fund, while Switzerland spent $783, the UK spent $497, and Sweden spent $351.
“Prices are higher in the United States than in these other countries,” said Washington University drug pricing expert Rachel Sachs. “The general reason is that other countries negotiate for these prices and we really don’t.”
The drug industry has argued that the absence of centralized government negotiations allows for more innovation in the U.S. and gives patients access to more drugs, The Hill says.
Pharmaceutical Research and Manufacturers of America said that data show that just half of the new drugs launched since 2011 that are available in Medicare Part B are available in the 14 other countries considered in a proposal to tie Medicare prices to those of other countries. The trade group also said that in a survey of its members, more than 75% said cutting Medicare Part B prices to match those in other countries would hurt their ability to do research on new drugs.