- President Donald Trump spoke Friday about ways to lower the price of prescription drugs.
- The speech covered ways to increase competition, get more negotiating power, and find ways to lower pharmaceutical list prices as well as the out-of-pocket costs patients are facing.
- Trump also took the opportunity to criticize “freeloading” by countries that pay less than the US for drugs.
President Donald Trump spoke Friday about lowering drug prices, calling out middlemen in the pharmaceutical industry and “freeloading” by other countries that pay less than the US for prescription drugs.
Trump focused on finding ways to increase competition, get more negotiating power, and lower pharmaceutical list prices and the out-of-pocket costs patients face.
The pharmaceutical industry, which had been anxiously awaiting Trump’s remarks, took the speech in stride. The Nasdaq Biotechnology Index was up 2%, the pharmacy benefit manager Express Scripts jumped 3%, and CVS Health and UnitedHealth Group, which both own PBMs, rose 2% and 1%, respectively.
In the speech, Trump also went after other countries that pay less than the US for drugs.
“It’s unfair, it’s ridiculous, and it’s not going to happen any longer,” he said. “It’s time to end the global freeloading once and for all.”
Trump also singled out the middlemen in the pharmaceutical industry, including PBMs that negotiate lower prices from drugmakers in the form of discounts and health plans that receive those discounts.
“We’re very much eliminating the middlemen,” Trump said. “They became very, very rich. They won’t be so rich anymore.”
The Trump administration also came out with a 44-page report titled “American Patients First” detailing how it plans to approach drug pricing.
As part of that report, the administration asked for feedback on the role of the rebates PBMs use to negotiate lower drug prices, and it suggested adding prices to ads for prescription drugs.
“If we want to have a free market for drugs, why not have them disclose their prices in ads too?” said Alex Azar, the secretary of health and human services, adding that he’d task the Food and Drug Administration with investigating such a practice.
Part of the plan also includes budget proposals that would change how drugs are paid for under Medicare, which insures Americans who are 65 and older.
The proposed changes include:
- More flexibility to improve pricing negotiations. The government currently can’t negotiate prices for drugs that are part of Medicare’s Part D program, which covers most prescription drugs.
- Giving free generics to seniors.
- Mandating that plans pass along rebates to patients.
- Creating an out-of-pocket maximum so that seniors aren’t on the hook for high prices.
In January 2017, Trump met with the heads of pharma companies, reiterating his interest in bringing drug prices down in the US.
This year, the president has been relatively quiet about the price of prescription drugs, though top officials in the Trump administration have called out different parts of the healthcare industry. Azar said in his speech Friday that drug pricing was the first and the last thing Trump brings up in conversations with him.