Trump says new proposal will lower some US drug prices

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"The administration is imposing foreign price controls from countries with socialized health care systems that deny their citizens access and discourage innovation", stated Stephen J. Ubl, president and CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA).

The United States does not directly negotiate drug prices with manufacturers and American consumers often pay the highest prices for drugs.

The Trump administration's new plan to pay for certain drugs in Medicare based on global prices quickly set off a war with the drug industry after it was unveiled Thursday - and both sides are charging ahead with aggressive statements that the other is ignoring patients.

"Some of the proposals make sense to us but most of our companies have relatively limited exposure to Part B and a total projected savings of $17.2Bn over five years (if the plan is fully implemented) should not be overly concerning to investors, in our view", wrote Credit Suisse analyst Vamil Divan in an October 25 note, referring to drugmakers covered by the bank's research team.

"If the goal is overall out of pocket cost reduction for consumers, these proposals are promising and offer some of the boldest challenges to the medical establishment", said Patel, who worked on health policy in the Obama administration.

Drugmakers immediately pushed back, arguing the plan amounts to government price-setting.

Less than two weeks before the midterm elections, President Donald Trump on Thursday announced a plan to lower prices for some prescription drugs, saying it would stop unfair practices that force Americans to pay higher prices than people in other countries do for the same medications. He made his announcement just ahead of the November 6 elections, with health care high among voters' concerns.

Trump has long promised sweeping action to attack drug prices, both as president and when he was running for the White House. Beneficiaries would save an estimated $3.4 billion through lower cost-sharing for physician-administered drugs.

The announcement came hours after the Trump administration released a report Thursday morning highlighting the steep spending by the U.S. government on prescription drugs.

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The Trump administration has said US drug prices and manufacturer revenues are subsidizing lower prices in other countries. The plan calls for Medicare, starting in 2020, to seek the much lower prices that European countries get for some of the most expensive drugs dispensed by doctors.

"Medicare was found to be paying the highest price for 19 out of the 27 drugs studied compared to these other countries", Azar tweeted. In a March Kaiser Family Foundation poll, eight in 10 respondents said drug costs are unreasonable and 92 percent said passing legislation to bring down the cost of prescription drugs should be a top or important priority.

President Donald Trump says will he take aim at "global freeloading" with his plan, which would run essentially as a pilot program within the Medicare Part B program. Some Democrats said the idea would do little in the short term and fall short of Mr. Trump's more aggressive campaign promise on drug prices.

BIO, which represents numerous companies most affected by this new proposal, said in a statement Thursday that it had repeatedly implored the administration to work with the group on reforms that the industry can stomach. CMS estimates that the Target Price would produce about a 30% savings over total spending for the selected Part B drugs. "Each country is making its own decisions around pricing and reimbursement for a drug based on their own budgets and mechanisms and policies and so on", he said in a phone interview.

The plan could meet resistance not only from drugmakers but from doctors, now paid a percentage of the cost of the medications they administer.

"This is not the end of the road, the end of the journey", he said. But it's largely been business as usual for drugmakers even as Trump has predicted "massive" voluntary price cuts.

An analysis of published studies on financial incentives under Medicare found otherwise.

Analysts expect the proposal will spur a flood of comments from industry and other corners of the healthcare system, potentially delaying the administration's proposed timeline for implementation.

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