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Earlier this afternoon in an event in the White House Rose Garden, President Donald Trump and HHS Secretary Alex Azar unveiled their plan for reducing the price of prescription drugs. Part of the president’s “America First” initiative, the program seeks to reduce the cost of pharmaceuticals by lowering the list prices, providing federal programs with the resources to negotiate prices, promoting market competition and reducing out-of-pocket costs. The Administration is further expected to pressure other countries to pay more for pharmaceuticals, ending what has been termed “foreign freeloading” of American innovation.
The 44-page proposal includes numerous immediate actions and other opportunities aimed specifically at addressing the four main areas: increased competition, better negotiation, lower list prices, and lower out-of-pocket costs. The administration will seek to increase competition for biologics and biosimilars, expanding the use of value-based purchasing, requiring the list prices of pharmaceuticals in commercial advertising and other transparency measures, and granting pharmacists the ability to disclose how to reduce out-of-pocket costs. The document further states that they will be working to create new incentives that would reward manufactures for low list prices.
Parts of the proposal overlap with the president’s budget that calls for reforming Medicare’s prescription drug program. These include allowing greater flexibility in benefit design to encourage better price negotiation, offering free generics to low-income seniors, requiring plans to share a minimum portion of drug rebates with patients, discouraging plans from accelerating beneficiaries into the catastrophic phase of the benefit with costly brand name drugs, and protecting seniors from catastrophic costs through a new out-of-pocket maximum. A similar Medicare Part B proposal includes limiting payment for price increases that are above the inflation rate.
Ahead of the announcement, Congressional Democrats released their counter-proposal on addressing prescription drug costs. The Affordable Prescription Drug Task Force, led by nine House Democrats, calls for allowing Medicare to negotiate prescription drug prices, forcing drug companies to reveal the full cost of producing their products, ending anti-competitive tactics such as pay-for-delay deals, and allowing the importation of prescription drugs from other countries. |
