New plan reneges on a popular campaign promise
One of President Trump’s most popular planks in his campaign platform was the promise to give Medicare the power to negotiate lower prescription drug prices. The so-called populist promise was liked by Democrats but disliked by Republicans. Now, according to an announcement made in the Rose Garden on Friday, May 11, Republicans are happy and Democrats are discouraged.
As we recently reported, 92 percent of Americans want the government to be able to negotiate drug prices. As of Friday, this is not going to happen.
The President reported that his plan will give power to the Medicare Part D private entities to negotiate prices. This will mean a continuation of the existing situation. The entities are the insurance companies and what are known as “pharmacy benefit managers.” These two groups now contract with Medicare and negotiate prices with pharmaceutical prices.
The issue with this system is that the “entities” receive rebates from the drug companies, which they generally keep rather than returning to Medicare. President Trump says he will curtail this practice while giving them more power. The thinking behind this part of the plan is that it will stimulate competition, thus lowering prices.
Other price-control actions
Secretary of Health and Human Services Alex Azar, who appeared at the press conference with Trump, said that the FDA is looking into compelling pharmaceutical companies to include list prices of drugs being hawked in TV ads.
Part of the plan would attempt to speed up the FDA’s approval process for over-the-counter versions of drugs. No specific examples were given.
President Trump also addressed the issue of lower drug prices overseas. On the campaign trail, in addition to promising the government would intervene in overpricing, he said consumers could use drugs from foreign countries to save money. He has reversed this assurance, as well.
In E.U. countries, where healthcare is universal, the government achieves lower pricing from Big Pharma. Now, suggesting that this practice has resulted in higher prices in the U.S., the President says he will not allow consumers to import lower-priced meds from overseas.
Who wins the drug-price competition?
How did Big Pharma take the news? The New York Times reports that the stock of some of the drug and biotech companies rose.
Will Medicare beneficiaries see drug-price relief? Not right away. Some of the multiple aspects of the plan will have to be legislated by Congress. Others could be activated through regulation. In other words, don’t hold your breath that drug price negotiations we actually ever happen.
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