Published: Mon, October 29, 2018
Health Care | By Oscar Goodwin

Trump seeks to base Medicare drug prices on lower overseas rates

Trump seeks to base Medicare drug prices on lower overseas rates

"It's hard to take the Trump administration and Republicans seriously about reducing health care costs for seniors two weeks before the election", Democratic Senate Minority Leader Chuck Schumer said in a statement.

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.

"Same company. Same box".

Meanwhile, he said the paying billions of dollars for its own home-grown drugs.

Trump has made lowering drug prices a central promise of his presidency. In the United Kingdom, for example, a drug company will go to the National Institute for Health and Care Excellence, or NICE, offering confidential discounts or rebates off of a drug's list price.

Under the new approach, the Centers for Medicare and Medicaid Services plans to experiment with a new way of setting prices for most drugs administered through Medicare's Part B program, which covers all doctor's visits for seniors and the drugs prescribed to them during their visits.

"In other words, Americans pay more so that other countries can pay less, very simple".

In addition to trying to cut the base price of the drugs, the administration, through HHS, is proposing changing how doctors who deliver these drugs are paid.

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"We have serious concerns with any changes to Medicare Part B that threaten patient access to lifesaving medicines, undermine physician care quality or discourage continued medical progress", Holly Campbell, a spokeswoman for the Pharmaceutical Research and Manufacturers of America, a trade association known as "PhRMA".

Trump is linking the prices Americans complain about to one of his longstanding grievances: foreign countries the president says are taking advantage of USA research breakthroughs.

The department says overall savings to USA programs like Medicare and to patients would total $17.2 billion over five years.

The administration is proposing new regulations that would allow it to lower the overall prices of these drugs, by including in its calculation of average sales price the prices paid in countries around the world with similarly advanced economies.

Interestingly while Trump is proposing to shift the Part B program to look more like worldwide systems, the president and many administration members have accused those same countries of leeching off the US.

Creating an index of prices tabulated from what countries with more centralized health coverage pay would allow the administration to drive down US 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 USA on par with the rest of the world. Medicare pays directly for them under its "Part B" coverage for outpatient care.

HHS Secretary Azar tweeted that "Medicare was found to be paying the highest price for 19 out of the 27 drugs studied compared to these other countries". Those drugs that stand to lose the most revenue include Rituxan from Genentech and Biogen, Amgen's Neulasta, Regeneron's Eylea and Genentech's Lucentis. "Medicare could achieve significant savings if prices in the USA were similar to those of other large market-based economies", the report concluded.

The United States spent almost $26 billion for Medicare Part B drugs in 2016, the most recent year for which data is available.

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"The United States will finally begin to confront one of the most unfair practices. that drives up the cost of medicine in the United States", Trump said.

"This is not the end of the road, the end of the journey", he said.

Any push to dramatically lower prices here could meet resistance not only from drugmakers but from doctors, another powerful lobby. However, HHS officials said the plan is designed so it would not cut into doctors' reimbursements.

Trump has harshly criticized the pharmaceutical industry, once asserting that the companies were "getting away with murder", a comment that sent pharmaceutical stocks tumbling.

While Medicare is barred from explicitly negotiating prices with drug companies, Trump's proposed changes are all created to use the collective power of the growing Medicare market to force drugmakers to bring down their prices or lose access to a potentially lucrative market.

A recent Associated Press analysis of prices for brand-name drugs found far more increases than cuts in the first seven months of this year.

Yet Mr. Azar disagreed, saying Big Pharma is "never going to walk away" from the huge US market and will have to either raise prices overseas or find space in their budgets to adjust to the new reality.

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