Trump teases upcoming plan to "really, really substantially" lower drug prices in US

US President Donald Trump said that plans to be disclosed next week will significantly reduce the prices of prescription drugs, although no further details were provided. "We are announcing something next week which is going to get them down really, really substantially," Trump remarked.

In May, Trump said that pharmaceutical companies would announce "voluntary massive" cuts to the prices of drugs in two weeks, although firm plans have yet to be revealed. Trump previously unveiled a blueprint seeking to reduce drug prices and increase competition for prescription drugs.

Trump's latest comments came shortly after the US Department of Health and Human Services revealed that starting next year, Medicare Advantage plans will be able to use tools employed by private-sector insurers to negotiate lower prescription drug prices for patients. HHS Secretary Alex Azar said the move will "drive down prices for some of the most expensive drugs seniors use," with plans required to pass on to patients more than half of the savings generated.

Under Medicare Part B, such drugs are currently paid for at their cost, plus a percentage fee for doctors, with spending under this programme reaching $25.7 billion in 2015. As part of the revised plans, patients will also be able to choose Medicare Advantage plans that require enrolees to use step therapy, which involves starting patients on less expensive options before moving them up to costlier drugs.

Seema Verma, administrator at the Centers for Medicare & Medicaid Services, noted that this practice is already "widely used" in the private sector. Pharmacy benefit managers (PBMs) welcomed the planned changes, with the Pharmaceutical Care Management Association (PCMA), calling the move "an important step toward reducing costs for the programme and beneficiaries." The PCMA added "some of the highest priced drugs are found in Medicare Part B, where PBMs currently don't play any meaningful role."

PBMs have also been a focus of the Trump administration to lower drug prices, with a recently proposed rule designed to curb kickback protections that allow pharmaceutical companies to offer rebates. Meanwhile, Pfizer CEO Ian Read said earlier this month that Trump will look to end rebates that drugmakers give PBMs, which could reduce patients' out-of-pocket costs.

For related analysis, see ViewPoints: Pfizer shares its vision of a rebate-free future.

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