President Trump on Monday called on drugmakers to lower their prices within the next month to be closer to those charged in other high-income countries, threatening to subject them to steep caps on how much they can earn from Medicare if they fail to do so.
“Starting today, the United States will no longer subsidize the health care of foreign countries, which is what we were doing, we’re subsidizing others’ healthcare, in countries where they pay a small fraction of what, for the same drug, that what we pay,” the president told reporters Monday at the White House.
Mr. Trump told reporters that “some prescription drug and pharmaceutical drug prices will be reduced almost immediately by 50% to 80% to 90%,” and “big pharma will either abide by this principle voluntarily or we’ll use the power of the federal government to ensure that we are paying the same price of other countries.”
The president said his move marks an expansion of the “most favored nation” idea from his first term, when the Centers for Medicare and Medicaid Services set steep price caps tied to the prices charged in other developed countries for how much it would pay for some prescription drugs.
“It’s called most favored nation,” Mr. Trump said. “We are going to pay the lowest price there is in the world. We will get, whoever is paying the lowest price, that’s the price that we’re going to get.”
At the time, that proposal applied only to drugs given by providers in hospitals and clinics through Medicare Part B — not the broader swath of prescriptions that seniors fill at drug store pharmacies. Medicare said it would only pay hospitals and doctors for a price based on the lowest amount paid among developed countries.
A report by the Trump administration during its first term found that the U.S. spends twice as much as some other countries on covering those drugs. Medicare Part B drug spending topped $33 billion in 2021.
That idea was blocked by the courts during Mr. Trump’s first term, after the administration shortcutted “rulemaking” steps to try to rush to implement the proposal in its final days. The Biden administration later formally abandoned the proposal and sought instead to curb drug costs through the Medicare Drug Price Negotiation Program created by Congress.
Under the new version of Mr. Trump’s “most favored nation” proposal, the White House says it will seek to develop new rules to revive the price caps in Medicare, in addition to a new “mechanism” to allow Americans to buy drugs directly from manufacturers at this price.
Drug manufacturers that “fail to offer most-favored-nation pricing” voluntarily will have the prices imposed on them through new rules, which the White House says it is directing the Department of Health and Human Services to propose.
Over the next month, CMS Administrator Dr. Mehmet Oz said the administration is planning to approach “pharmaceutical companies to talk specifically about what we want the most favored nation price to be, based on the best data we have.”
“We’re looking forward to a thoughtful interaction with these corporate leaders, many of whom we’ve spoken to and in quite will agree, the system is not right the way it is,” Oz said.
It’s not yet clear which drugs will be included in the president’s push, although he mentioned the “fat shot drug” as potentially one of them.
A CMS spokesperson was not able to immediately respond to a request for comment, asked about how the agency was determining which drugmakers to approach and what the pricing would be.
White House officials said ahead of the announcement that they were looking for price reductions in drug costs across both federal and private health insurance, not just Medicare. No specific class of drugs is being targeted, they said, but they are planning to focus on drugs with the biggest disparity between U.S. and foreign prices.
Americans pay significantly more than citizens of other countries do for many of the same pharmaceutical drugs. Experts have blamed it on a range of factors, including a complex web of insurers, middlemen and providers that underpin the U.S. health care system, unlike other countries, which set prices through government-run health care systems.
Industry’s response to order
The drug industry has opposed “most favored nation” pricing as a “deeply flawed proposal,” calling it “importing socialized medicine” and claiming it could upend small and mid-size biotech companies in the U.S.
“Applying other countries’ antiquated approach to how they value — and pay — for medicines will stall investment across America’s biotech companies, risk access to vital treatments and cures for millions of American patients, and lead to fewer American jobs,” John F. Crowley, president of the Biotechnology Innovation Organization, said in a statement Monday.
The pharmaceutical industry argued that Mr. Trump’s 2020 attempt would give foreign governments the “upper hand” in deciding the value of medicines in the U.S. The industry has long argued that forcing lower prices will hurt profits, and ultimately affect innovation and its efforts to develop new medicines.
“To lower costs for Americans, we need to address the real reasons U.S. prices are higher: foreign countries not paying their fair share and middlemen driving up prices for U.S. patients,” Stephen J. Ubl, president of the Pharmaceutical Research and Manufacturers of America, said in a statement.
Ubl said “importing foreign prices from socialist countries would be a bad deal” for patients and workers. However, he praised the White House for ordering the U.S. Trade Representative to address “freeloading on American-financed innovation.”
“The administration is right to use trade negotiations to force foreign governments to pay their fair share for medicines. U.S. patients should not foot the bill for global innovation,” Ubl said.
A group representing pharmacy benefit manager companies — the “middlemen” that drugmakers blame for driving up prices — praised Mr. Trump “for rightfully recognizing the price is the problem.”
Greg Lopes, a spokesperson for the Pharmaceutical Care Management Association, did not address that Mr. Trump also pledged to “cut out the middlemen” as part of his new order, calling on HHS to create a way for Americans to buy medications directly from drugmakers at the most favored nation price.
“We should look at every avenue to get drug companies to lower list prices. Americans are getting ripped off paying the highest prescription drug prices of any nation, and that is why America’s PBMs have repeatedly called on big drug companies to lower their prices,” Lopes said in a statement.
Alexander Tin and
Jennifer Jacobs
contributed to this report.
https://www.cbsnews.com/news/lower-medications-cost-trump-truth-social-executive-order/
