The Trump administration takes on drug prices


However, he says under his administration's new plan Medicare will be allowed to negotiate directly with drug companies and Americans will be able to pay the lower price other countries are paying.

In a speech Thursday at the Department of Health and Human Services, Trump said his administration would be taking the "revolutionary" move of allowing Medicare to directly negotiate prices with drug companies, which he says have "rigged" the system, causing United States patients to pay more for their medicines. These higher prices mean that Medicare pays almost TWICE as much as it would for the same or similar drugs in other countries.

President Donald Trump arrives to talk about drug prices during a visit to the Department of Health and Human Services in Washington, Thursday, Oct. 25, 2018.

The department says overall savings to US programs like Medicare and to patients would total $17.2 billion over five years.

Health Secretary Alex Azar said that the administration will test the new pricing model in half the country to start, targeting drugs made by a single manufacturer.

Drugmakers are sure to push back, arguing it would be tantamount to adopting price controls.

President Donald Trump's new pledge to crack down on "the global freeloading" in prescription drugs had a sense of déjà vu.

Health care is high among voters' election-year concerns.

"The government pays whatever price the drug companies set without any negotiation", Trump said. Beneficiaries would save an estimated $3.4 billion through lower cost-sharing for physician-administered drugs.

"With the action I am unveiling today, the United States will finally begin to confront one of the most unfair practices", Trump said during a speech at the Department of Health and Human Services headquarters in Washington.

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The proposal was met with hope and skepticism, with several experts saying they were happy the administration was taking on Medicare Part B's rising drug prices but questioning its approach.

The Biotechnology Innovation Organization, which represents makers of biotechnology drugs, said the proposal would hurt innovation as well as patients.

"Each country is making its own decisions around pricing and reimbursement for a drug based on their own budgets and mechanisms and policies and so on", he said in a phone interview.

"Americans pay more so other countries can pay less". HHS Secretary Alex Azar said politics would have nothing to do with it. The list includes many cancer drugs. Officials said they're seeking input on how to select the areas of the country that will take part in the new pricing system. Drug spending within Medicare Part B reached $22 billion in 2015, and drug costs have increased by an average of 8.6 percent annually since 2007.

Physician-administered drugs cost Medicare $27 billion in 2016.

The 19-page HHS report looks specifically at drugs purchased and dispensed by doctors themselves, under Medicare's Part B program. Matt Brow, president of industry consulting firm Avalere Health, said he expects the administration to publish the rule for comment by year's end.

The plan could meet resistance not only from drugmakers but from doctors, now paid a percentage of the cost of the medications they administer. In a March Kaiser Family Foundation poll, eight in 10 respondents said drug costs are unreasonable and 92 percent said passing legislation to bring down the cost of prescription drugs should be a top or important priority.

Trump, too, promised more to come and said he will soon announce "some things that will really be tremendous".

Trump has harshly criticized the pharmaceutical industry, once asserting that the companies were "getting away with murder".

Five months ago, Trump unveiled a blueprint to address prohibitive drug prices, and his administration has been feverishly rolling out ideas ranging from posting drug prices on television ads to changing the rebates that flow between drugmakers and industry middlemen. The number of increases slowed somewhat and they were not quite as steep as in past years, the AP found.

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