Experts say Trump’s Plan to Lower Drug Prices Misses Mark, Unlikely to Work

Alan Dow
Alan Dow

Experts told Healio Family Medicine that the drug pricing plan presented by President Donald J. Trump to lower drug costs suggests he fails to recognize what is causing high drug prices and consequently, faces an uphill climb in becoming a reality.

On Friday, Trump announced the days of pharmaceutical companies, special interest groups and foreign governments controlling drug pricing are over, and that high drug prices will start to decrease.

As part of the administration’s announcement on drug pricing, HHS released the blueprint for putting the plan into action, called American Patients First. The document, which often uses words like ‘the president may’, and ‘further opportunities’ provides more specifics on the president’s plan, such as these components listed under ‘immediate action’:

  • better negotiation by trying value-based purchasing in federal programs as well as having more substitution in Medicare Part D to address price increases for single-source generics; and
  • increased competition to avert manufacturer gaming of regulatory processes such as Risk Evaluation and Mitigation Strategies as well as advance competition and innovation for biologics; and
  • incentives for lower list prices by having FDA assess whether or not manufacturers should be required to include list prices in advertising as well as modernizing Medicare’s drug-pricing dashboard to make price generic competition and increases more transparent; and
  • lowering out-of-pocket costs by allowing pharmacists to tell patients in Medicare Part D when they could pay less out-of-pocket by not using insurance as well as have information about drug price increases and lower cost alternatives on the Part D Explanation of Benefits statements.

Healio Family Medicine editorial board member and general internist Alan Dow, MD, MSHA, said in an interview the president’s plan avoids many of the strategies called for in ACP’s position paper on lowering drug prices.

He noted that the "Trump plan lets specific plans under Medicare Part D negotiate prices, but it does not let CMS itself negotiate prices. CMS, being much larger, would have a lot more leverage to bring down prices."

Experts told Healio Family Medicine that the drug pricing plan presented by President Donald J. Trump to lower drug costs suggests he fails to recognize what is causing high drug prices and consequently, faces an uphill climb in becoming a reality.
Photo Source:Shutterstock

“ACP wants cost transparency. Trump talked about pharmaceutical ads having to give prices, but I’m not sure that is going to fix the problem all that much because if that prescriber or physician says you need that medicine, patients are reluctant to make choices based on price. ACP wants Medicare to directly negotiate drug prices which Trump did not mention doing. ACP wants to end patent extensions which Trump did mention. ACP also wants to allow drug reimportation with safeguards which he did not mention. So I’d give Trump one to one-and one-half stars out of four,” Dow said.

Arthur Caplan
Arthur L. Caplan

Arthur L. Caplan, PhD, founding head of the division of medical ethics at the New York University School of Medicine, told Healio Family Medicine the speech was largely anticlimactic.

“A lot of buildup, a lot of promise, and then the elephant gave birth to a mouse. All in all, Trump’s plan is a very big disappointment. The plan doesn’t amount to significant reform that is likely to reverse high, out-of-control drug prices. There are some small components — such as speeding up the generic medication approval process and allowing for only one affordable drug for certain diseases — that are useful, but there are a few things Trump said that are simply bizarre.”

On that last point, Caplan zeroed in on Trump’s demanding fairness from foreign countries buying drugs from manufacturers.

“Trump is breaking trade agreements and tariffs, so the chance of these countries [being more accommodating on trade] is between zero and a big minus. This is also ridiculous because if these other countries decided they would start paying more for drugs, it doesn’t explain why the price is so high,” he said. “The whole idea of blaming the foreign situation misses the point — we need to ask ourselves why are other countries doing better? Because they bargain more effectively and that is a point the president did not take, that’s why. Trump didn’t bite the bullet and say in Medicare Part D we’re going to directly negotiate the drug prices that the government is paying for, which is what every other country is doing, thereby giving them lower prices.”

Dow said part of Trump’s plan reneges on a promise he made during his campaign.

“Candidate Trump said the pharmaceutical companies will have to negotiate with Medicare. President Trump said they won’t have to, which was probably reassuring for the pharmaceutical companies to hear.”

Pari Mody
Pari Mody

Pari Mody, an associate at the law firm of Arnold & Porter, told Healio Family Medicine, as President acknowledged on Friday, that Congressional action will be needed on many of the actions within the blueprint, such as eliminating the branded prescription drug fee and the cap on Medicaid rebates for brand and generic drugs.

Though the President said support for his plan was “forthcoming” from the House and Senate, Dow questioned if lawmakers would act quickly on many of the plan’s components.

“I’m trying to give the Trump administration the benefit of the doubt, but congressional action is going to be tricky with the election cycle and what not,” he said in the interview. “I’m not sure Congress, staring at an election, is going to be interested in big pieces of legislation and I am not sure we have the patient voice as advocating as strongly as big business. It’s very likely that 6 months down the road, a year down the road, none of Trump’s plan has happened.”

Caplan also expressed concerns that much of the status quo will remain unchanged.

“A year from now we will be exactly where we are now. We will still have some companies gouging when they have a monopoly. Companies will still have the ability to extend their patents through shenanigans like slow-release versions of the same medicines to keep the patent moving,” he said.

“The drug companies will continue to tell patients to ask for name drugs, but they won’t mention generics. I’m not saying name-brand drugs don’t work, but what I am saying is that there are usually cheaper ways of doing things that the drug companies don’t advertise," he said.

Conversely, Mody thought some Congressional support is possible, although there will be limited opportunities for Congress to enact reforms.

“While Republicans hold the majority, we could see some of these policies reflected in proposed legislation. The drug pricing plan has the support of several Republican legislators, including those who were present at the unveiling of the drug pricing blueprint -- Senator Bill Cassidy (R-Louisiana), Senate Finance Committee Chair Orrin Hatch (R-Utah), Energy & Commerce Subcommittee on Health Chair Michael Burgess (R-Texas), Representative Buddy Carter (R-Georgia), and Representative Greg Gianforte (R-Montana). Given the approaching mid-term elections, however, the congressional calendar is tight and there will be limited opportunities to pass legislation.”

“Each of [the president’s] strategies is divided into immediate actions,’ which the administration may implement during the coming months, and ‘further opportunities,’ which are additional actions that the administration is considering and for which the administration is requesting stakeholder feedback,” she added.

Mody encouraged stakeholders to thoroughly review the further opportunities section of the document, which includes potential policies that would impact Medicaid and Medicare, the 340B Drug Pricing Program, and FDA review and approval processes.

Those wishing to comment on the blueprint can find instructions on how to do so starting May 16 at this website: https://www.federalregister.gov/documents/2018/05/16/2018-10435/blueprint-to-lower-drug-prices-and-reduce-out-of-pocket-costs. Comments must be received by July 16.

The drug pricing issue has become increasing relevant in health care, with prescription prices rising almost 10% in 2016 from the year before. Egregious reported examples of price increases such as EpiPen’s 500% price increase since 2007, prices of certain dermatology drugs spiking more than 400% since 2009, the average price of insulin nearly tripling from 2002 to 2013, and oral cancer drug prices that have risen steadily since 2000. – by Janel Miller

For more information :

HHS.gov. https://www.hhs.gov/sites/default/files/AmericanPatientsFirst.pdf. American Patients First. Accessed May 14, 2018.

Disclosure: Neither Caplan nor Mody report any relevant financial disclosures. Healio Family Medicine was unable to determine Dow’s relevant financial disclosures prior to publication.

 

 

Alan Dow
Alan Dow

Experts told Healio Family Medicine that the drug pricing plan presented by President Donald J. Trump to lower drug costs suggests he fails to recognize what is causing high drug prices and consequently, faces an uphill climb in becoming a reality.

On Friday, Trump announced the days of pharmaceutical companies, special interest groups and foreign governments controlling drug pricing are over, and that high drug prices will start to decrease.

As part of the administration’s announcement on drug pricing, HHS released the blueprint for putting the plan into action, called American Patients First. The document, which often uses words like ‘the president may’, and ‘further opportunities’ provides more specifics on the president’s plan, such as these components listed under ‘immediate action’:

  • better negotiation by trying value-based purchasing in federal programs as well as having more substitution in Medicare Part D to address price increases for single-source generics; and
  • increased competition to avert manufacturer gaming of regulatory processes such as Risk Evaluation and Mitigation Strategies as well as advance competition and innovation for biologics; and
  • incentives for lower list prices by having FDA assess whether or not manufacturers should be required to include list prices in advertising as well as modernizing Medicare’s drug-pricing dashboard to make price generic competition and increases more transparent; and
  • lowering out-of-pocket costs by allowing pharmacists to tell patients in Medicare Part D when they could pay less out-of-pocket by not using insurance as well as have information about drug price increases and lower cost alternatives on the Part D Explanation of Benefits statements.

Healio Family Medicine editorial board member and general internist Alan Dow, MD, MSHA, said in an interview the president’s plan avoids many of the strategies called for in ACP’s position paper on lowering drug prices.

He noted that the "Trump plan lets specific plans under Medicare Part D negotiate prices, but it does not let CMS itself negotiate prices. CMS, being much larger, would have a lot more leverage to bring down prices."

Experts told Healio Family Medicine that the drug pricing plan presented by President Donald J. Trump to lower drug costs suggests he fails to recognize what is causing high drug prices and consequently, faces an uphill climb in becoming a reality.
Photo Source:Shutterstock

“ACP wants cost transparency. Trump talked about pharmaceutical ads having to give prices, but I’m not sure that is going to fix the problem all that much because if that prescriber or physician says you need that medicine, patients are reluctant to make choices based on price. ACP wants Medicare to directly negotiate drug prices which Trump did not mention doing. ACP wants to end patent extensions which Trump did mention. ACP also wants to allow drug reimportation with safeguards which he did not mention. So I’d give Trump one to one-and one-half stars out of four,” Dow said.

PAGE BREAK

Arthur Caplan
Arthur L. Caplan

Arthur L. Caplan, PhD, founding head of the division of medical ethics at the New York University School of Medicine, told Healio Family Medicine the speech was largely anticlimactic.

“A lot of buildup, a lot of promise, and then the elephant gave birth to a mouse. All in all, Trump’s plan is a very big disappointment. The plan doesn’t amount to significant reform that is likely to reverse high, out-of-control drug prices. There are some small components — such as speeding up the generic medication approval process and allowing for only one affordable drug for certain diseases — that are useful, but there are a few things Trump said that are simply bizarre.”

On that last point, Caplan zeroed in on Trump’s demanding fairness from foreign countries buying drugs from manufacturers.

“Trump is breaking trade agreements and tariffs, so the chance of these countries [being more accommodating on trade] is between zero and a big minus. This is also ridiculous because if these other countries decided they would start paying more for drugs, it doesn’t explain why the price is so high,” he said. “The whole idea of blaming the foreign situation misses the point — we need to ask ourselves why are other countries doing better? Because they bargain more effectively and that is a point the president did not take, that’s why. Trump didn’t bite the bullet and say in Medicare Part D we’re going to directly negotiate the drug prices that the government is paying for, which is what every other country is doing, thereby giving them lower prices.”

Dow said part of Trump’s plan reneges on a promise he made during his campaign.

“Candidate Trump said the pharmaceutical companies will have to negotiate with Medicare. President Trump said they won’t have to, which was probably reassuring for the pharmaceutical companies to hear.”

Pari Mody
Pari Mody

Pari Mody, an associate at the law firm of Arnold & Porter, told Healio Family Medicine, as President acknowledged on Friday, that Congressional action will be needed on many of the actions within the blueprint, such as eliminating the branded prescription drug fee and the cap on Medicaid rebates for brand and generic drugs.

Though the President said support for his plan was “forthcoming” from the House and Senate, Dow questioned if lawmakers would act quickly on many of the plan’s components.

“I’m trying to give the Trump administration the benefit of the doubt, but congressional action is going to be tricky with the election cycle and what not,” he said in the interview. “I’m not sure Congress, staring at an election, is going to be interested in big pieces of legislation and I am not sure we have the patient voice as advocating as strongly as big business. It’s very likely that 6 months down the road, a year down the road, none of Trump’s plan has happened.”

Caplan also expressed concerns that much of the status quo will remain unchanged.

“A year from now we will be exactly where we are now. We will still have some companies gouging when they have a monopoly. Companies will still have the ability to extend their patents through shenanigans like slow-release versions of the same medicines to keep the patent moving,” he said.

“The drug companies will continue to tell patients to ask for name drugs, but they won’t mention generics. I’m not saying name-brand drugs don’t work, but what I am saying is that there are usually cheaper ways of doing things that the drug companies don’t advertise," he said.

Conversely, Mody thought some Congressional support is possible, although there will be limited opportunities for Congress to enact reforms.

“While Republicans hold the majority, we could see some of these policies reflected in proposed legislation. The drug pricing plan has the support of several Republican legislators, including those who were present at the unveiling of the drug pricing blueprint -- Senator Bill Cassidy (R-Louisiana), Senate Finance Committee Chair Orrin Hatch (R-Utah), Energy & Commerce Subcommittee on Health Chair Michael Burgess (R-Texas), Representative Buddy Carter (R-Georgia), and Representative Greg Gianforte (R-Montana). Given the approaching mid-term elections, however, the congressional calendar is tight and there will be limited opportunities to pass legislation.”

“Each of [the president’s] strategies is divided into immediate actions,’ which the administration may implement during the coming months, and ‘further opportunities,’ which are additional actions that the administration is considering and for which the administration is requesting stakeholder feedback,” she added.

Mody encouraged stakeholders to thoroughly review the further opportunities section of the document, which includes potential policies that would impact Medicaid and Medicare, the 340B Drug Pricing Program, and FDA review and approval processes.

Those wishing to comment on the blueprint can find instructions on how to do so starting May 16 at this website: https://www.federalregister.gov/documents/2018/05/16/2018-10435/blueprint-to-lower-drug-prices-and-reduce-out-of-pocket-costs. Comments must be received by July 16.

The drug pricing issue has become increasing relevant in health care, with prescription prices rising almost 10% in 2016 from the year before. Egregious reported examples of price increases such as EpiPen’s 500% price increase since 2007, prices of certain dermatology drugs spiking more than 400% since 2009, the average price of insulin nearly tripling from 2002 to 2013, and oral cancer drug prices that have risen steadily since 2000. – by Janel Miller

For more information :

HHS.gov. https://www.hhs.gov/sites/default/files/AmericanPatientsFirst.pdf. American Patients First. Accessed May 14, 2018.

Disclosure: Neither Caplan nor Mody report any relevant financial disclosures. Healio Family Medicine was unable to determine Dow’s relevant financial disclosures prior to publication.

 

 

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