Trump plan for drug prices won't include direct negotiations

Donald Trump speaking

President Donald Trump is launching what he says will be the "most sweeping action in history to lower the price of prescription drugs for the American people".

"Our plan will end the dishonest double dealing that allows the middle man to pocket rebates and discounts that should be passed on to consumers and patients", Trump said, referring to distributors who buy drugs from directly from manufacturers and then mark them up dramatically before selling them to pharmacies.

Look into reducing or eliminating the drug supply chain's reliance on rebates pharmacy-benefit managers negotiate in secret with drug companies. "Government has also been part of the problem because previous leaders turned a blind eye to this incredible abuse".

"We support the administration's efforts to tackle out-of-control drug costs, which include addressing the root cause: skyrocketing list prices set by pharmaceutical companies", Aetna CEO Mark Bertolini said in a statement following the president's address. The policy blueprint also calls for giving health plans flexibility to negotiate lower prices for high-cost drugs without competition. Health insurance companies and providers spent another $200 million to protect the status quo and keep prices artificially high, the president said. The plan also calls for streamlining and speeding up the approval process for over-the-counter drugs.

Vt. Sen. Patrick Leahy said, "Today's announcement was more of the same- a flurry of soothing words and wheel spinning, and no willingness or courage to take on price gouging and anti-competitive behavior by the giant drug firms".

In the U.S., Medicare is the largest purchaser of prescription drugs, covering 60 million seniors and Americans with disabilities, but it is barred by law from directly negotiating lower prices with drugmakers.

"Getting rid of rebates and other price concessions would leave patients and payers, including Medicaid and Medicare, at the mercy of drug manufacturer pricing strategies", said the Pharmaceutical Care Management Association, a lobby for PBMs, in a statement following Trump's speech.


President Donald Trump has unveiled his long-promised plan to bring down drug prices.

But during Trump's first year in office, the pharmaceutical industry's top lobby group boosted its spend by 30% to work on patent issues, importation, Medicare negotiations and more.

He also singled out Big Pharma for special criticism, noting that drug companies spent $280 million on lobbying a year ago, "more than tobacco, oil, and defense contractors combined". A drug maker will negotiate with the entity paying for the drug, which, in the US, is often a pharmacy benefits manager, such as Express Scripts, or a health plan administered by a business or a union.

Creating an out-of-pocket maximum so that seniors aren't on the hook for high prices. He said it would take years to restructure the USA drug system. They should only be reimbursed by insurers to align interests for the lowest prices, Azar said.

Instead, Trump cobbled together some old and new ideas to increase competition and improve transparency in the highly complex drug pricing system with the ultimate aim of wringing more savings for consumers.

And the system for paying for the drugs dispensed under Medicare's Part B program also has to change, Azar added.

Azar later told reporters that the administration would "seek input" on doing away with drug rebates in the Medicare system to encourage more direct discounts. "Trump's few tough words for pharma are a cover-up for the sweetheart deal he really is offering the megacorporations that raise prices on Americans by the day", said Peter Maybarduk, MD, director, Public Citizen's Access to Medicines program.

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