Under the new plan, Trump said the Department of Health and Human Services would allow Medicare to determine the price it pays for certain drugs based on cheaper prices paid by other nations. But the drug industry is unlikely to embrace the proposal, and a similar effort to address Medicare Part B prices in the Obama administration went nowhere, says Politico.
Trump said the plan, known as the International Pricing Index, would end "global freeloading" by having the Department of Health and Human Services permit Medicare to set payments for drugs at a target price based on the discounts drug companies give other countries. HHS Secretary Alex Azar said on Twitter that some of the drugs cost four times as much in the United States.
"Same company. Same box".
Trump "wants the kind of discounts that are applied in Germany and the Netherlands, for the reference reimbursement prices to be applied in the USA", said Rodrigo Moreno-Serra, associate professor of global health economics at the University of York in England.
Many large pharmas have limited exposure to Part B, which encompasses drugs administered in doctor's offices or hospital outpatient clinics. The HHS also said Medicare beneficiaries not covered by the model could see a decrease in drug costs as the average price used to calculate traditional Medicare reimbursement will also go down.
- Don't expect immediate rollbacks.
Such a reaction was anticipated by the Trump administration, which has recently sought to show more action on its promises to take on rising drug prices. The administration's authority to implement the rule exists under the authority of the Center for Medicare and Medicaid Innovation, which was created under the Affordable Care Act, explained Rachel Sachs, an associate professor of law at Washington University in St. Louis, in a phone interview.
Both protecting people with preexisting conditions and bringing down prescription drug prices rank high among voters concerns headed into the election.
Drugmakers are sure to push back, arguing it would be tantamount to adopting price controls.
In those countries, the government health systems directly negotiate with pharmaceutical makers over the price of their drugs.
Creating an index of prices tabulated from what countries with more centralized health coverage pay would allow the administration to drive down USA drug costs without putting in place direct curbs on prices - though Azar rejected the idea that the administration was reading from the playbook of nationalized medical programs to bring the US on par with the rest of the world.
Drug pricing expert Peter Bach of Memorial Sloan Kettering's Center for Health Policy and Outcomes called the plan "a pretty substantive proposal" but one that faces "serious political challenges". But basing Medicare reimbursement on what other countries pay would be a huge departure from how the program now works - and run counter to Republicans' allegiance to the free market system. But that's "quite literally the opposite of what is being proposed".
Federal judge orders Georgia to stop tossing absentee ballots
In other instances, machines showed ballots being cast before any the person actually voted. "To the contrary, it strengthens it. She outlined a procedure to allow voters to resolve alleged signature discrepancies.
Democratic leaders on Capitol Hill were dismissive.
Trump added that doctors would be paid "a flat rate" regardless of the cost of medications that they prescribe in order to counter doctors he says who prescribe more expensive medications so they can earn a higher commission.
The main health insurance industry trade group, at odds with drugmakers over prices, applauded the administration's action. The Trump administration's proposal calls for the creation of an experimental "international pricing index" that would use the lower prices paid by other advanced industrial countries as benchmarks for payments under the Part B program.
Interestingly while Trump is proposing to shift the Part B program to look more like global systems, the president and many administration members have accused those same countries of leeching off the US.
Before that visit, the department released a report that finds US prices for the top drugs administered in doctor's offices are almost twice as high as in foreign countries.
The proposed changes are related to the Medicare Part B program that pays for medications that patients receive in hospitals or in doctor's offices. In the past, Azar has taken aim at that particular piece of the program since Part B spending has grown much faster than for drugs dispensed by pharmacies under Medicare's Part D program.
The department says overall savings to US programs like Medicare and to patients would total $17.2 billion over five years. However, HHS officials said the plan is designed so it would not cut into doctors' reimbursements. Azar said politics would have nothing to do with it.
Trump, too, promised more to come and said he will soon announce "some things that will really be tremendous".
Trump has harshly criticized the pharmaceutical industry, once asserting that the companies were "getting away with murder".
The president in May also claimed drug companies would be announcing "massive" voluntary price cuts. "It would increase prices in Europe by an unclear amount, so it seems like it would lower overall drug spending and innovation".
Yet Mr. Azar disagreed, saying Big Pharma is "never going to walk away" from the huge USA market and will have to either raise prices overseas or find space in their budgets to adjust to the new reality.