President Donald Trump’s new pledge to crack down on “the global freeloading” in prescription drugs had a sense of déjà vu.
Five months ago, Trump unveiled a blueprint to address prohibitive drug prices, and his administration has been feverishly rolling out ideas ranging from posting drug prices on television ads to changing the rebates that flow between drugmakers and industry middlemen.
Thursday, Trump proposed having Medicare base what it pays for some expensive drugs on the average prices in other industrialized countries, such as France and Germany, where prices are much lower. The proposal is in the early stages of rule-making and awaiting public comments.
The U.S., Trump said, will “confront one of the most unfair practices, almost unimaginable that it hasn’t been taken care of long before this.”
The proposal was met with hope and skepticism, with several experts saying they were happy the administration was taking on Medicare Part B’s rising drug prices but questioning its approach.
Walid Gellad, director of the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh, said in an online post that the administration’s proposed solutions were unclear. And, he said, they would “face insurmountable challenges.”
While some industry watchers pointed to the announcement as a political move, Wells Fargo pharmaceutical analyst David Maris said that this is a broader effort by the president and his administration to attack the root causes of high drug prices.
“The reality is he could very easily not take this on and do what other administrations have done and let the prices keep rising.”
Trump’s international pricing plan is not as far along as the rebate proposal. Rather, it is an “advanced notice of proposed rule-making.” The proposed rule could come in spring 2019, and Azar said the new model could begin in late 2019 or early 2020.
Yet, on Friday, Azar signaled the proposal could change, telling an audience at the Brookings Institution that the administration is “open to any number of alternative ideas.”
Avalere’s Brow said there is a good chance the proposal will change significantly.
“The sweeping nature of the proposal makes the stakes higher and makes it harder to implement,” Brow said.
If the administration moves forward, it would bypass Congress and implement a pilot under the Center for Medicare & Medicaid Innovation’s purview. The pilot would phase in over five years and apply to 50 percent of the country. Azar said there would be no changes to Medicare benefits and no restrictions on patient access.
Stephen Ubl, president of the industry trade group Pharmaceutical Research and Manufacturers of America, or PhRMA, said imposing foreign price controls from countries with socialized health care systems would harm patients and hinder drug discovery and development.
Azar, a former executive at pharmaceutical manufacturer Eli Lilly, told reporters Thursday that “you may hear the tired talking points” that this will affect innovation. He disputed that idea, concluding that “less than 1 percent of pharma [research and development] could potentially be impacted by this change.”
