Once it was clear direct negotiation wasn’t on the agenda, investors snapped up shares of the biggest US drug makers, including Abbvie (ABBV – Free Report), Amgen (AMGN – Free Report) and Merck (MRK – Free Report), each of which finished the day 2% or more above their mid-speech lows.
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Vt. Sen. Patrick Leahy said, “Today’s announcement was more of the same- a flurry of soothing words and wheel spinning, and no willingness or courage to take on price gouging and anti-competitive behavior by the giant drug firms”. “That is unfair, it’s ridiculous, and it’s not going to happen any longer”.
The U.S. pays 70 percent of the profits for brand-name drugs, according to the Organization for Economic Cooperation and Development. “When foreign governments extort unreasonably low prices from U.S. drug makers, Americans have to pay more to subsidize the enormous cost of research and development”, he said.
In a statement, the patient group Patients for Affordable Drugs, while praising some of the proposals, said that others were “a slew of technical changes” that do not say how exactly they will bring down prices. “The president is willing to take on high drug costs in a way which other presidents have not”.
Trump has said that drugmakers are “getting away with murder”, and has expressed an interest in negotiating drug prices, something the government isn’t allowed to do for Medicare and Medicaid.
He said he would make it easier for pharmacists to inform patients of cheaper alternatives and would speed the approval of over-the-counter drugs “so that patients can get more medicines without prescription”. “The middlemen became very, very rich”.
Despite the rhetoric, Wall Street analysts, lobbyists and academics say the plan, which heavily targets the role pharmacy benefit managers play in the healthcare system, will do little to put downward pressure on healthcare spending.
As public outrage increases, there are growing calls by patient advocates and others for more government regulation of prices, a practice common in other industrialized countries. Would the drug’s price similarly fade into the background? Our subscribers rely on FiercePharma as their must-read source for the latest news, analysis and data on drugs and the companies that make them. “We’re not calling for Medicare negotiation in the way that Democrats have called for”, one of the senior officials told reporters Thursday night.
“With all the buildup the administration has given it, the president’s speech was deeply underwhelming”. Those steps include: requiring insurers to share rebates from drug companies with Medicare patients and changing the way Medicare pays for high-priced drugs administered at doctors’ offices.
The plan went on to float some “even bolder actions” that the Department of Health and Human Services said it is reviewing and seeking feedback on.
Other nations, also struggling with high drug prices, scorned Trump’s advice on this issue.
But, whether parts of the administration’s new proposals requiring congressional actions – mostly within the realm of competition and negotiation – can gain traction remains uncertain. But administration officials offered few specifics on how that would work. The rebates, which are negotiated in secret by a middleman industry called pharmacy benefit managers (PBMs), are not considered kickbacks under current law. House Minority Leader Nancy Pelosi of California said Trump “pulled his punch”.
Pharmaceutical experts aren’t pinning high hopes on President Donald Trump’s plan to reduce drug prices.
Rick Pollack, president and CEO of the American Hospital Association: “The AHA appreciates numerous actions that the Administration has proposed, such as incentives to speed up the arrival of generic drugs into the market and reducing out-of-pocket costs for patients”. He noted that Alex Azar, Secretary of HHS, “used to run [a drug company], and nobody knows the system better than Alex”.
The strategy will be outlined in a speech Friday. “Sadly, it’s ordinary Americans who will continue to pay the price for Trump’s broken promise”. The budget request also included a provision moving some drugs covered under Part B to Part D to leverage private plans’ negotiating power.
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Instead, Trump cobbled together some old and new ideas to increase competition and improve transparency in the highly complex drug pricing system with the ultimate aim of wringing more savings for consumers. “Drug manufacturers in the United States set their own prices, and that is not the norm elsewhere in the world”, a spokesman for the 28-member European Union said on Friday.
