WASHINGTON — President Trump’s plan to bring down the price of prescription drugs, released as part of his administration’s budget proposal Monday, made no mention of what his health secretary said is the “most important thing”: lowering the actual list prices drug makers set for their products.
Instead, the proposals are a hodgepodge of relatively narrow policies that take aim at various parts of the Medicare and Medicaid programs. One would reduce the amount of money doctors and hospitals are reimbursed for hospital-administered drugs under Medicare Part B; another would let some states engage in more aggressive negotiation for drugs in their Medicaid programs. Others take aim at a drug discount program for hospitals and at seniors’ out-of-pocket spending.
That’s a far cry from what Alex Azar, secretary of the Department of Health and Human Services, told senators at his confirmation hearing last month that he wanted to accomplish.
“The most important thing we have to figure out is, can we reverse the incentive on list prices?” Azar said. Later, he added, “Can we create incentives that actually pull down those list prices so that when the patient walks in needing to pay out of pocket at the pharmacy, that they’re not hit with those kind of costs?”
Lowering list prices is important not just for uninsured patients, but also because that price trickles down through the system, shaping the prices that the government, hospitals, and even insured patients pay.
The budget says that various changes will “discourage drug manufacturers’ price and rebate strategies,” but does not describe specifically how any of the changes will bring list prices down. It does say that changes to the Part B program will “discourage manufacturers from increasing prices faster than inflation.”
“Many drugs are too expensive for Americans and too many patients continue to be priced out of the medicines they need,” the budget’s section on drug pricing proposals opens. “The goal of the Administration’s comprehensive strategy is to address the problem of high drug prices, provide greater access to lifesaving medical products, and to ensure that the United States remains the leader in biomedical innovation.”
Hints of what the budget might say trickled out Thursday night, when a handful of media outlets published stories based on a closed briefing with Azar and Mick Mulvaney, director of the Office of Management and Budget.
Even with few concrete details, patient and consumer groups were quick to criticize the narrow scope of the proposals — and to point out that pharmaceutical companies weren’t directly the targets of any of the interventions.
“There’s very little to indicate that these proposals will do anything to mitigate the manufacturer list prices, which is the core problem,” Will Holley, spokesperson for the Campaign for Sustainable Rx Pricing, told STAT Friday. The group chiefly represents hospitals and health plans.
“The changes proposed in the budget wouldn’t change incentives around list price, or get at the heart of the problem, which is where drug companies are setting those prices,” Meghan Scott, executive director of the Coalition for Affordable Prescription Drugs, also told STAT Friday. That group mostly represents pharmacy benefit managers and insurers.
Erin Mershon contributed reporting.