Trump unveils plan for cutting drug prices. Will it work?

Trump unveils plan for cutting drug prices. Will it work?

President Donald Trump's long-awaited plan to bring down drug prices, unveiled Friday, will mostly spare the pharmaceutical industry he previously accused of "getting away with murder" and instead focus on increasing private competition and requiring more openness about costs.

Trump made the remarks at the White House Rose Garden in a speech to introduce what he called "the most sweeping action in history" to lower drug prices. "The president is apparently abandoning his campaign promise to authorize Medicare to negotiate directly with drug companies to lower prices".

That idea has always been supported by Democrats but is a non-starter for drugmakers and most Republicans in Congress. In a speech, the president announced measures to increase competition and pricing transparency as ways to drive down costs, which have been spiraling. Those include a proposal requiring drugmakers to disclose the cost of their medicines in their television advertisements.

Overall, Trump emphasized how businesses all across the pharmaceutical supply chain, from drugmakers to insurers to the pharmacy benefits manager "middlemen" and the government, are hurting Americans who take prescription drugs.

The Wall Street Journal reports that the price of drug stocks actually went up after Trump's speech. "Frankly, Alex used to run one of them", Mr. Trump said.

"With all the buildup the administration has given it, the president's speech was deeply underwhelming". That includes Azar, a former top executive at Eli Lilly.

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Azar, in an interview with CNBC's "Squawk Box" said everybody's gaining something from higher list prices - except patients and taxpayers. "There is very little new in the administration's plan, and little if anything that will make a difference in the near future, as the president has promised", Rachel Sachs, an associate professor of law at Washington University School of Law, said in an email.

In a blueprint released simultaneously, the administration proposed more modest changes to the way Medicare pays for costly drugs. "It's going to be months for the kind of actions that we need to take, here".

"This weak plan abandons the millions of hard-working families struggling with the crisis of surging drug prices", said Rep. Nancy Pelosi, D-Calif. But the officials gave few specifics.

Raising Drug Prices in Other Countries Won't Help Here: "There's not a sensible health economist alive, or any economist, that will tell you that higher prices overseas will lead to lower prices here", Andrea Harris, senior vice president of health care at Height Capital Markets in Washington, told Bloomberg. And older drugs for common ailments like diabetes and asthma routinely see price hikes around 10 percent annually. The plan includes more than 50 initiatives, though many of them involve potential future actions rather than immediate changes. Pharmacy benefit managers, which negotiate with drug manufacturers, have been a common target from industry and lately even administration officials. "Because those incentives are driving it", Azar said. "The proposal is vague on details and filled with more slogans than actual sound economic policies". "Health policy experts like this idea because it reduces the burden on patients with serious chronic illnesses and spreads the expense of needed medications across the entire insured population", The New York Times said.

The result, in part, is the highest drug prices in the world. That's more than twice the $497 per person spent in the United Kingdom, which has a nationalized health care system.

Instead, "American Patients First" is centered on changes that could push drugmakers to lower prices on their own. Democrats have long favored giving Medicare that power, but Republicans traditionally oppose the idea.

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