President Trump said Friday he will put “American patients first” by speeding cheaper drugs to market, forcing companies to disclose prices and leveraging trade deals to put U.S. consumers on a level playing field with those abroad.
The president also vowed to crack down on benefit managers who negotiate rebates from pharmacies manufacturers, saying they must pass savings to consumers instead of pocketing cash generated by higher list prices.
“The middlemen became very, very rich,” Mr. Trump said. “They won’t be so rich anymore.”
All told, Mr. Trump said his blueprint is the “most sweeping action in history to lower the price of prescription drugs for the American people.”
Yet he walked away from a campaign pitch to use the federal government’s clout under Medicare to directly negotiate down prices, a policy change that Democrats want but that Big Pharma ardently opposes.
Instead, the White House wants to give private plan sponsors within Medicare more negotiating power.
Speaking from the White House Rose Garden, Mr. Trump also took aim at economically advanced nations that slash drug prices for their own citizens, knowing they can rely on Americans to subsidize the costly research that goes into developing lifesaving cures here at home.
“It’s unfair, and it’s ridiculous, and it’s not going to happen any longer,” he said. “Americans will not be cheated any longer.”
He told U.S. Trade Representative Robert Lighthizer to make prescription prices a priority during upcoming negotiations with foreign powers.
The administration also will study whether companies should be required to disclose drug prices in their television ads, bringing transparency straight to U.S. living rooms.
Prescription drug prices are a key issue for American voters, who will reshape Congress later this year. New treatments for cancer and other diseases can cost more than $100,000, while consumers are feeling squeezed by insurance plans that require them to still pay thousands out of pocket.
Mr. Trump made drug prices a key issue on the campaign trail in 2016, saying Big Pharma is “getting away with murder,” before highlighting the issue in his State of the Union Address this year.
“Prices will come down substantially,” he told Congress. “Watch.”
After the long wait, his proposals impressed top Republicans, who called is “sweeping” and “sophisticated,” but fell flat with Democrats, who chided Mr. Trump for reversing his stance on federal negotiation and say he’s sparing the industry responsible for soaring prices.
“Instead of putting forth a bold initiative, the president pulled his punch,” said House Minority Leader Nancy Pelosi, California Democrat. “The president is breaking his promise to the American people to allow Medicare to negotiate lower drug prices, which would save seniors billions of dollars at the pharmacy.”
Health and Human Services Secretary Alex M. Azar II said Americans are seeing lower prices already, due to a record amount of generic drugs approved by the administration in the last year.
Yet Mr. Azar said the major restructuring announced by Mr. Trump could take “months” to filter down to consumers.
Mr. Trump can carry out some of the proposals on his own, without relying on a highly polarized Congress in a midterm election year.
He will prohibit Medicare’s prescription-drug benefit from entering contracts that use “gag rules” to keep patients from finding out if they could pay less out-of-pocket by not using insurance.
“This is a total rip off, and we are ending it,” Mr. Trump said.
But he’s leaning on lawmakers to give him a hand in some places. Under his fiscal 2019 budget, Mr. Trump would provide free generic drugs, without co-pays, to low-income people on Medicare, and require the program to pass along at least a third of rebates directly to seniors.
Among other changes, HHS said it will publish a side-by-side comparison of drug prices in the U.S. and nations within the Organization for Economic Co-operation and Development to examine “freeloading” by other nations with major economies.
Critics say efforts to extract concessions abroad miss the point.
“Lifesaving medicines aren’t more expensive here because they cost less elsewhere,” Jason Cone, executive director of Doctors Without Borders-USA, said in an op-ed for The Hill newspaper. “They’re priced out of reach everywhere because pharmaceutical corporations are charging exorbitant prices simply because they can — and the U.S. government lets them.”
Other critics say Mr. Trump’s administration is too cozy with the drug industry to crack down on its business model.
Mr. Azar is a former pharmaceutical executive, and Swiss drugmaker Novartis revealed last week it paid $1.2 million to longtime Trump attorney Michael Cohen with the aim of getting insight into the administration’s policies.
Sen. Ron Wyden, Oregon Democrat, announced Friday a formal inquiry into the arrangement, saying Novartis was in high-stakes pricing negotiations with Medicare over a pricey cancer drug at the time.
“The American public needs to know who at the company signed off on this scheme and what were they expecting in return,” Mr. Wyden said. “Drug prices are already out of reach for too many American families, and drug companies need to be held accountable if they are breaking the law.”
Speaking generally, Mr. Azar said the American people will be able to judge for themselves whether Mr. Trump is serious about drug prices.
“Trust us by our actions and the deeds in the blueprint,” he said. “It’s the hardest-hitting plan ever proposed by a president.”