Politics, Pricing

Trump to unveil proposal to reduce prices on doctor-administered drugs as midterms loom

Days away from a contentious midterm election battle, the Trump administration is once again attempting to throw its weight at exorbitant drug prices, a hot button issue the president has long rallied against but has so far done little about.

DC-based POLITICO reported last night that Trump is set to unveil a proposal that would make sweeping changes to how Medicare pays for some drugs in a speech to the HHS on Thursday afternoon, which some see as a ploy to distract away from the Republican agenda to overhaul Obamacare.

The scourge of high drug prices has been met with ire on both sides of the aisle, with Democrats lashing out at their GOP counterparts for not using their control of both Congress and the executive branch to compel changes to the freewheeling fashion the industry operates on drug prices.  While on the campaign trail, both Hillary Clinton and Trump chastised drugmakers for their pricing behavior and made pledges to hold the industry accountable. And after capturing the presidency, Trump sustained his attack on the industry standard of price hikes, proclaiming drugmakers were “getting away with murder.” In May, Trump announced that drug companies would make “massive” price cuts within two weeks — none which materialized. An analysis of branded prescription drugs, released by the Associated Press last month, found that for all intents and purposes it’s been business as usual for drugmakers, with price hikes continuing to outstrip cuts. The only silver lining is that the number of increases has diminished somewhat, and are not as steep as in past years, the AP noted.

The multi-pronged proposal that still needs refinement and passage through the federal rule-making docket was sent to the White House last month, and is expected to save Medicare $17 billion over five years, and shave the cost of certain drugs by up to 30 percent, according to POLITICO. The plan intends to utilize Medicare’s innovation center to negotiate the prices for some drugs that are directly administered by doctors — not prescriptions purchased by patients at pharmacies — in a bid to keep them on par with lower prices paid by other nations, according to the report.

The proposal will also outline an “international pricing index,” in which American drug prices would be benchmarked against 16 other nations — such as Canada, Czech Republic, Finland, France, Germany, Japan, Spain, Sweden and the United Kingdom — where target drug prices are collectively 44 percent lower. Prices would slowly be lowered to international levels over five years. However, this part of the proposal may run into trouble as many drugmakers aren’t particularly forthcoming about the prices they settle on for their drugs following negotiations with foreign governments.

Another part of the new plan includes letting private sector vendors negotiate with drugmakers, akin to how health insurers negotiate prices in Medicare’s part D program. Medicare would test this approach for certain expensive drugs in certain geographic areas, where participation would be mandatory for physicians and hospitals. In addition, officials intend to amend the incentive doctors have to prescribe expensive drugs. Amending that system to a flat fee, in contrast to a percentage, could compel doctors to use the most effective rather than the most expensive treatments, POLITICO said.

In 2016, President Obama attempts to affect change into the way physician-administered drugs were paid for fizzled out after being thwarted by Democrats and Republicans alike, not to mention doctors, hospitals and the über-connected drug lobby. Despite Trump’s sustained bravado, his latest proposal may suffer a similar fate.

The speech, Trump’s first address to the health department, is expected at 2 pm. It follows some modest, albeit indirect, successes for the administration in pushing back at the pharmaceutical industry.  This month an HHS proposal requiring drugmakers to reveal prices in their TV ads came to the fore, in addition to the passage of a law banning gag-clauses, which prevent pharmacists from informing customers when it’s cheaper to pay in cash for a drug instead of using insurance, as STAT noted.

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Sr. Manager, Regulatory Affairs, CMC
CytomX Therapeutics San Francisco, CA
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Catalytic Data Science Charleston, SC
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Flatiron Health New York City or San Francisco

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