PhRMA opposed to parts of Trump's drug pricing plan

PhRMA opposed to parts of Trump's drug pricing plan

So it is with President Donald Trump's plan, unveiled on May 11th, to lower the price of prescription drugs.

Doctors should get out of the business of making money off of providing prescription drugs to Medicare beneficiaries, Health and Human Services Secretary Alex Azar said Monday.

Allowing Medicare to negotiate prices is unacceptable to the powerful drug lobby, which has spent tens of millions of dollars since Trump's inauguration to influence the Washington conversation around drug prices, including a high-profile TV advertising campaign portraying its scientists as medical trailblazers. And he doesn't need congressional approval to do it. Unfortunately, neither figures in President Trump's drug plan.

Today PBMs, such as CVS Caremark or Express Scripts, make deals in the form of rebates. "It took decades to erect this very complex, interwoven system", Azar said in a briefing following the speech. "At the same time, it is not clear at all how they are going to lower list prices".

Azar said he intends to force PBMs to write contracts based on a set price for drugs, rather than a percentage-based rebate.

Before the announcement, industry experts said they expected the plan to have little impact on pharmaceutical companies.

- Banning a pharmacist "gag rule", which prevents druggists from telling customers when they can save money by paying cash instead of using their insurance. "If they could do away with the rebates and have transparent net prices, I think that's an enormous step forward", he said.

But Express Scripts spokesman Brian Henry takes issue with targeting PBMs. Put another way, prices would continue to be largely set by pharma companies.


- The Trump administration is considering expanding Medicare's ability to negotiate the cost of drugs by giving private payers a role in setting the price of medicines administered in hospitals and doctors' offices, Health and Human Services Secretary Alex Azar said on Monday.

In his remarks, Azar outlined a presidential directive to "bring negotiation where it doesn't exist", merging Part B, Medicare's program for physician-administered drugs, with Part D. The Part D program was implemented in 2006-when Azar was deputy health secretary and before he departed to become president of Eli Lilly's US subsidiary. In Rose Garden remarks at the White House Friday, Trump called his plan the "most sweeping action in history to lower the price of prescription drugs for the American people". "This weak plan abandons the millions of hard-working families struggling with the crisis of surging drug prices", said Democratic Leader Nancy Pelosi, in a statement.

But analysts caution it could lead to higher out-of-pocket costs and less choice for patients. "Some Part B drugs - many of which are infusions like chemotherapy - don't have competitors, so negotiation may not help much".

And on top of that, Azar says he is looking at whether he can require drug companies to include the price of their products in those television ads that already include seemingly endless lists of scary side effects.

Mitchell and Levitt both doubt that drug companies can be shamed into lowering prices and losing profit.

Public outrage over drug costs has been growing for years as Americans face pricing pressure from multiple sources: New medicines for life-threatening diseases often launch with prices exceeding $100,000 per year.

So far, investors in the pharmaceutical industry seem unfazed. At the moment it can not haggle directly with drug companies. "I'm not interested in hearing those talking points anymore".

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