Health and Human Services Secretary Alex Azar speaking at a Brookings Institution event in Washington on Friday said he would push ahead with drug pricing reforms despite the pushback from the pharmaceutical industry.
“Finally seeing this system reformed, in fact, is one of the pharmaceutical industry’s ultimate nightmares. I can tell you that because it used to be my job to have pharmaceutical nightmares.” Azar is a former Eli Lily executive.
The Trump administration is going ahead with its plan to “substantially reduce the price of certain costly drugs administered under Medicare,” despite drugmakers charges the president’s plan would import “socialized” price controls.
Basically, Trump wants to tie what Medicare pays for certain drugs to the much lower prices paid for the same drugs in other economically advanced countries. However, the administration’s plan would only apply to Medicare Part B, which covers drugs administered in doctors’ offices.
One thing about the plan is certain – It is a “stunning move,” according to Forbes. If it works, it could force pharmaceutical and biotechnology companies to rethink their business models.
Forbes points out that Trump has said time and again that patented drug pricing is a bad deal for Americans. “For decades, other countries have rigged the system so that American patients are charged much more—and in some cases, much, much more—for the exact same drug,” Trump said. “In other words, Americans pay more, so that other countries can pay less.”
PhRMA — the deep-pocked trade group representing pharmaceutical companies in the U.S. jumped on the announcement of the plan on Thursday, arguing the plan would “jeopardize access to medicines.” On Friday, Azar pointed responded to the charge, saying “something has to change,” and this would give patients more access to needed medications.
In a study released by the administration on Thursday, data shows Medicare pays 80 percent more than other advanced industrial countries for some of the most expensive medicines administered at doctors’ offices.
The study found that overall, the prices paid for Medicare Part B drugs with the greatest expenditures in the U.S. exceeded the prices paid in countries with similar economic conditions. The amount by which U.S. prices exceeded those of international comparators varied significantly by product, and there was no clear pattern as to which countries were consistently paying lower prices. We find these higher U.S. prices mean that the Medicare program pays nearly twice as much as it would pay for the same or similar drugs in other countries.
The administration will accept public comments before implementing its proposal, which doesn’t require congressional approval., and right now, Trump does not have a whole lot of support from Congress and certainly not from the pharmaceutical industry.
