Trump’s latest drug pricing plan may offer benefits to patients, but faces obstacles
The Trump administration’s latest effort to reduce drug prices met with generally positive reviews from policy analysts, who also noted the difficult path ahead to put the plan into effect.
In a speech in October, President Donald J. Trump unveiled his proposal, the International Pricing Index, which would gradually lower drug payment levels to levels based on international prices and set payment amounts for storing and handling drugs that are not be tied to the drug’s cost. The strategy would be phased in over 5 years, apply to 50% of the country and would cover most drugs in Medicare Part B. In a statement, the administration said the proposal could save American taxpayers and patients $17.2 billion by 2025.
Doctors who analyzed the International Pricing Index at Healio Family Medicine’s request — including a high-ranking CMS official during the Obama administration — said that although the plan seems reasonable and offers benefits, pharmaceutical companies wield a lot of power that hinder its implementation.
“We’re taking aim at the global freeloading that forces American consumers to subsidize lower prices in foreign countries through higher prices in our country,” Trump said in announcing the plan.
“You go to some countries and [prescription drugs] would be 20% the cost of what we pay, and in some cases much less than that. It’s wrong. It’s unfair. It’s not surprising. This is a revolutionary change [I’m proposing],” Trump added.
Nancy Nielsen, MD, PhD, a former senior advisor at CMS while Barack Obama was president, and now the senior associate dean for Health Policy at the University at Buffalo, said in an interview Trump acted wisely when choosing a strategy that limits Congressional involvement, where pharmaceutical industry lobbying efforts would likely be centered.
“This latest proposal is innovative, very good, and long overdue. It’s a step in the right direction and it’s a smart model. If the International Pricing Index becomes reality, it will be run by CMS which could bypass a lot of House and Senate interference,” she said. “However, it’s going to face enormous opposition to come to fruition. I know how pharmaceutical companies work, and they will try to use their patient advocacy groups to whip patients into a frenzy by wrongly giving the impression this proposal means patients will lose access to drugs.”
Industry opposition to the proposal began the day it was announced.
“The administration is imposing foreign price controls from countries with socialized health care systems that deny their citizens access and discourage innovation,” Pharmaceutical Research and Manufacturers of America (PhRMA) president and CEO Stephen J. Ubl said in a statement. “These proposals are to the detriment of American patients. The United States has a competitive marketplace that controls costs and provides patients with access to innovative medicines far earlier than in countries with price controls, and it’s why we lead the world in drug discovery and development. Americans have access to cancer medicines on average about two years earlier than in developed countries like in the United Kingdom, Germany and France.”
As Nielsen noted, part of PhRMA’s argument hinged on the potential of the proposal to limit the availability of medications.
“The proposed Medicare Part B model would jeopardize access to medicines for seniors and patients with disabilities living with devastating conditions such as cancer, rheumatoid arthritis and other autoimmune diseases,” Ubl continued. “The administration’s proposal will also hinder patient access by severely altering the market-based Medicare Part B program by reducing physician reimbursement and inserting middlemen between patients and their physicians. We oppose changes to Medicare that threaten patient access to innovative, lifesaving medicines and are disappointed the administration put the needs of patients aside with these proposals.”
Nielsen added that even some in the medical community might fight to keep Trump’s plan from becoming reality.
“Since hospitals and physicians currently get a percentage-based add on of drug prices, the International Pricing Index will impact the business model of many rheumatologists, oncologists, and other specialty medicine practitioners who currently choose a higher-priced drug to boost their earnings. Therefore, hospitals and specialty groups might also try and prevent the plan from occurring,” Nielsen said.
Healio Family Medicine editorial board member and general internist at Virginia Commonwealth University Alan Dow, MD, MSHA, told Healio Family Medicine there are still some questions the administration has not answered weeks after the plan was first introduced.
“The plan sounds interesting and might work. But how will the medications that are part of this program be chosen? You can imagine the lobbying that will go on. It will be interesting to watch what happens to drug prices in the end, if anything,” he said.
Dow added that allowing Medicare to negotiate directly with pharmaceutical companies — which has broad public and medical society support — might make a greater impact on drug prices.
“While this latest Trump proposal has some upside for patients, there are even bolder ideas out there that better address the challenge of the high cost of prescription medications,” he said.
David Hitzeman, DO, MACOI, and chair of the American Osteopathic Association’s bureau on socioeconomic affairs said while there are many positives to the International Pricing Index, it appears hinged on a high level of cooperation from multiple groups, which does not always occur.
“I applaud the comprehensive nature of this plan but have concerns about how the public and private sectors will successfully work together,” he said in an interview.
“Because of the complexity of the issues and the variable incentives of the stakeholders it will need to be implemented incrementally. It is important that all involved entities set a common goal to provide high quality, cost effective pharmaceuticals in a competitive market environment, with limited government involvement. If they can make it work, there is potential for better transparency into the true costs of drug development and how pharmaceuticals are priced,” Hitzeman continued.
The proposal appeared to have some initial bipartisan support.
Senator Dick Durbin (D-Ill.), a member of the Senate Appropriations Committee, said the “announcement is a step in the right direction,” in a tweet written the day of the announcement.
How physicians can comment
The public has until Dec. 31 to comment on on the proposal through the website: https://www.cms.gov/Regulations-and-Guidance/Regulations-and-Policies/eRulemaking/index.html.
HHS said that it may issue a proposed rule on the plan in the spring of 2019, with its implementation starting in spring 2020. – by Janel Miller
Disclosure s : Hitzeman reports no relevant financial disclosures. Healio Family Medicine was unable to determine the other contributors’ relevant financial disclosures prior to publication.