Washington, Oct 25 The world reaps the benefits of American genius and innovation, while Americans pick up the tab, President Donald Trump said Thursday as he announced new measures to lower the drug prices in the country, which he said are higher in the U.S. and lower in other parts of the world.
Another limitation, she said, is that it only affects a particular slice of Medicare beneficiaries whose drugs are covered under Part B, which related to medicines administered in a clinical setting.
"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 during a speech at the Department of Health and Human Services.
"This is a revolutionary change", President Donald Trump said in a speech on Thursday at the Department of Health and Human Services, The New York Times reported. Same company, same box, same pill, made in the same location, and you will go to some countries and it will be 20 percent [of the cost of drugs in the United States] because of what we pay and in some cases, much less than that.
- The plan would not apply to medicines people buy at the pharmacy, just ones administered in a doctor's office, as are many cancer medications and drugs for immune system problems. It also says that the proposed changes would remove financial incentives for doctors to prescribe higher-priced drugs, since they would no longer be paid based on a drug's cost but instead would receive a flat fee.
- Don't expect immediate rollbacks.
In another twist, the plan is structured as an experiment through a Medicare innovation center empowered to seek savings by the Affordable Care Act.
Donald Trump may be trying to direct voters' attention to a migrant caravan in Central America, but he also knows it's a health-care election. Trump has promised sweeping action to attack drug prices, both as president and when he was running for the White House. He made his announcement just ahead of the November 6 elections, with health care high among voters' concerns.
Under the plan, closing that gap would be accomplished by shifting Part B from paying a drug's average sales price plus a percentage mark-up to reimbursement based on an index of global prices.
Although HHS describes the plan as a "free-market approach" that protects incentives for private sector development of new medicines, pharma companies blasted it as a way to impose price controls on important therapies that will harm patients. 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.
Announcing his plan on Thursday, Trump linked the prices Americans complain about to one of his longstanding grievances: foreign countries the president says are taking advantage of US research breakthroughs.
Nicholas Florko is a Washington correspondent for STAT, reporting on the the intersection of politics and health policy.
"Americans pay more so that other countries can pay less", he added. But that's "quite literally the opposite of what is being proposed".
"We don't negotiate because we don't use the threat of walking away and other countries do", said Rachel Sachs, an associate professor of law at Washington University.
Democratic leaders on Capitol Hill were dismissive.
Obama proposed changing the percentage-based payment system for Part B drugs but was met with fierce opposition from oncologists and rheumatologists.
The health insurance industry, at odds with drugmakers over prices, was pleased with the administration's action. Trump argued that other countries were being "very disrespectful" by selling their prescription drugs to Americans for higher prices than their citizens are paying for them.
The program, which has been proposed as a pilot, would be implemented in about half the country and is expected to launch in late 2019 or early 2020, Azar explained at the press briefing on Thursday. "I don't think so", the secretary said of drug makers. "US prices were higher for most of the drugs included in the analysis, and USA prices were more likely to be the highest prices paid among the countries in our study". The list includes many cancer drugs. "If we paid the prices other nations pay, we'd bring the $1 billion down to $187 million dollars a year".
Sales of Amgen drugs through Part B, for example, totaled about $3.7 billion in 2016 - or about a fifth of the biotech's USA revenue of $17.5 billion in 2016, according to figures from Leerink.
The HHS said the plan would save American taxpayers and patients $17.2 billion and would cause total payment for the affected drugs to drop by 30 percent. Today, Medicare reimburses doctors and hospitals the average sales prices of the drugs, plus 6 percent to cover the cost of giving medications to patients.