US President Donald Trump outlines plan to lower drug costs

President Donald Trump on Friday unveiled plans to increase competition in the prescription medicine market and lower patients' out-of-pocket costs in an effort to tackle high drug prices in the US. Under the plan, dubbed American Patients First, rules preventing government programmes from getting better drug discounts will be lifted, although it will not permit the government to directly negotiate prices with drugmakers, as previously suggested.  

The blueprint contains more than 50 initiatives, including incentives for drug companies to lower list prices, as well as pushing other developed nations with tighter price controls to pay more in the interest of fair trade. The announcement follows a white paper released by the Trump administration in February proposing several strategies targeting drug prices, including the implementation of annual spending limits for patients on Medicare and providing free generics to senior citizens.  

Trump has previously accused drugmakers of "getting away with murder" regarding the cost of some drugs. The President has also called for drugmakers to lower prices while promising to cut regulations in an effort to speed drug development.  

"Everyone involved in the broken system — the drugmakers, insurance companies, distributors, pharmacy-benefit managers and many others — contribute to the problem," Trump stated on Friday, adding "government has also been part of the problem because previous leaders turned a blind eye to this incredible abuse."  

Trump further remarked "we're very much eliminating the middlemen," without providing specification. Meanwhile, Health and Human Services Secretary Alex Azar, who promised earlier this month that "bold action is on the way" regarding drug pricing, indicated that the administration questions the entire rebates system for negotiating discounts "because right now every incentive is for the drug company to have a very high list price and to negotiate list price down, often in a very nontransparent way," Azar said. However, he noted that the plan will use pharmacy benefit managers to help the government obtain larger discounts of certain expensive treatments currently purchased through Medicare.

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Moreover, the administration also highlighted a desire to include drug prices in advertisements. "If we want to have a free market for drugs, why not have them disclose their prices in ads too," questioned Azar, noting that he will direct the FDA to investigate the matter.  

FDA Commissioner Scott Gottlieb stated that the agency "shares the goal of ensuring that American patients have access to quality and affordable care that meets their needs." The commissioner said that the agency has taken a number of steps under its previously announced action plan. 

In particular, Gottlieb, who recently chided pharmacy benefit managers for their role in delaying access to biosimilars, has released plans to lower generic drug prices, while the company also disclosed reforms to hasten the authorisation of complex generics. Specifically Gottlied stated Friday "we're helping remove barriers to generic drug development and market entry in an effort to spur competition that results in lower drug prices", adding "we've committed to timelier generic drug reviews to reduce the cycles of review that generic applications typically undergo." 

In addition, the FDA Commissioner said "the agency is committed to adopting strong policies and taking action, when necessary, to reduce gaming of statutory and regulatory requirements to help ensure that drug companies don’t use anticompetitive strategies to delay development and approval of important generic drugs." 

Commenting on the news, Wells Fargo & Co. analyst David Maris, who described the plan as "a first shot across the bow", remarked "the industry is among the most profitable of any industry in the US and as such probably has room to give," continuing "if it doesn't reform itself, it will be reformed and this is the beginning of that reform."  

Conversely, in comments made ahead of the release of the proposal, analysts at Height Capital Markets predicted "we expect more rhetoric than reform," adding "the president's bark will be worse than his bite as he blames all parties within the drug supply distribution chain." 

For related analysis, see ViewPoints: Score one for the home team- pharma off the hook again after drug pricing comments.

 

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