US President Trump today declared in a White House speech his intent to “take steps” to lower drug prices by stopping “gaming of regulatory and patent processes by drug makers to unfairly protect monopolies,” as well as increasing price transparency and promoting biosimilars and generics. But to do this, his administration will take on what it sees as “freeloading” on US innovation by foreign governments, and addressing “unfair” intellectual property and market access policies in trade agreements.

The plan as outlined appears to offer some proposals, such as updating a drug database for greater transparency, possibly requiring prices to appear with drug ads, and making generics free for low-income senior citizens. And the administration also will publish “a comparison of drug prices in the United States with those in other OECD countries, to examine freeloading,” it says.

But public health advocates reacted strongly to the announcement, saying it may only exacerbate problems of medicines access at home and worldwide.

The video of the speech is available here.

There are few details regarding Trump’s plan. A fact sheet issued today is reprinted below:

President Donald J. Trump’s Blueprint To Lower Drug Prices

A BURDEN ON THE AMERICAN PEOPLE: Drug prices are being driven up unfairly, taking a toll on the American people. 

• Excessively high drug prices, foreign freeloading, and a system rigged to reward list price increases, are burdening the American people.
  • According to the Organization for Economic Co-operation and Development (OECD), the United States had the highest per-capita pharmaceutical spending in 2015.
• Senior citizens pay more in Medicare Part B and Part D because government rules prevent health plans and vendors from negotiating the better deals seen in other markets.
• Some hospitals that receive drug discounts under the 340B program, designed to help safety net facilities, do not provide meaningful levels of charity care to low-income and vulnerable patients, ultimately pushing up drug prices for patients with private health insurance.
• Lower-cost drugs are kept out of the market by drug companies gaming regulatory processes and the patent system in order to unfairly maintain monopolies.
• Lack of transparency in drug pricing benefits special interests and prevents patients from being able to make fully informed decisions about their care.
• Other countries use socialized healthcare to command unfairly low prices from U.S. drug makers. This places the burden of financing drug development largely on American patients and taxpayers, subsidizes foreign consumers, and reduces innovation and the development of new treatments.
  • The United States pays more than 70 percent of branded drug profits among OECD countries.

TAKING ACTION TO PUT AMERICAN PATIENTS FIRST: President Donald J. Trump’s blueprint includes new actions and proposals to drive down drug prices for all Americans.

• President Trump’s blueprint will seek to encourage innovation, while also promoting better price competition and addressing foreign freeloading.
• The Department of Health and Human Services (HHS) will:
  • Take steps to end the gaming of regulatory and patent processes by drug makers to unfairly protect monopolies.
  • Advance biosimilars and generics to boost price competition.
  • Evaluate the inclusion of prices in drug makers’ ads to enhance price competition.
  • Streamline and accelerate the approval process for over-the-counter drugs.
  • Speed access to and lower the cost of new drugs by clarifying policies for sharing information between insurers and drug makers.
  • Avoid excessive pricing by relying more on value-based pricing by expanding outcome-based payments in Medicare and Medicaid.
  • Work to give Part D plan sponsors more negotiation power with drug makers.
  • Examine which Medicare Part B drugs could be negotiated for a lower price by Part D plans, and improving the design of the Part B Competitive Acquisition Program.
  • Update Medicare’s drug-pricing dashboard to increase transparency.
  • Prohibit Part D contracts that include “gag rules” that prevent pharmacists from informing patients when they could pay less out-of-pocket by not using insurance.
  • Require that Part D plan members be provided with an annual statement of plan payments, out-of-pocket spending, and drug price increases.
  • Work across the Administration to address intellectual property theft and foreign freeloading.
• The President’s blueprint also seeks feedback about other potential actions, including:
  • Reserving certain Part D incentives only for drug makers that stop raising prices.
  • Ending Obamacare’s Medicaid rebate cap, which encourages higher drug prices.
  • Including drug maker copay discount cards in Medicaid best price calculations.
  • Making changes to the Medicaid Drug Rebate Program rules to remove barriers to innovation and competition.
  • Reducing incentives to deliver Medicare Part B drugs in the most expensive setting.
  • Requiring Pharmacy Benefit Managers to act in the best interests of patients.
  • Paying for value in Medicare to spur development of drugs that cure illnesses rather than simply manage symptoms.
  • Requiring beneficiaries to be told what their out-of-pocket costs will be prior to receiving a Part B drug or a Part D drug prescription, and whether lower-cost alternatives exist.
  • Requiring “safety net” hospitals paid under Medicare Part B to use their 340B drug discounts to provide care to more low-income and vulnerable patients.
• The U.S. Trade Representative will prioritize addressing unfair intellectual property and market access policies in our trade agreements, so that partners contribute their fair share to innovation.
• The Administration will publish a comparison of drug prices in the United States with those in other OECD countries, to examine freeloading.

BUDGET PROPOSALS TO LOWER DRUG PRICES: The President’s blueprint includes proposals from his budget that would increase competition and reform Federal programs.

• President Trump has proposed reforms to the Medicare Part D program, including:
  • Allowing greater flexibility in benefit design to encourage better price negotiation.
  • Offering free generics to low-income seniors.
  • Requiring plans to share a minimum portion of drug rebates with patients.
  • Discouraging plans from accelerating beneficiaries into the catastrophic phase of the benefit with costly brand name drugs.
  • Protecting seniors from catastrophic costs through a new out-of-pocket maximum, while ensuring plans are incentivized to limit excessive costs.
• Medicare Part B reforms proposed by the President would limit payment for price increases that are above the inflation rate and cut incentives for doctors to write high-price prescriptions.
• Reforms would ensure hospitals paid under Medicare Part B that provide more than one percent of their patient costs in charity care could retain a discount under the 340B program.
• The President has proposed actions to maximize competition and innovation, including curbing abuse of FDA safety rules and the 180-day “first-to-file” exclusivity clock.

BUILDING ON ADMINISTRATION EFFORTS: The blueprint will build upon actions President Trump’s Administration has already taken to increase competition and curb high drug prices.

• FDA’s 2017 generic drug approvals contributed to prescription drug buyers saving $8.8 billion.
  • These dramatic savings were driven in part because FDA set multiple approval records in 2017, including the most generic drugs approved in a year.
  • FDA launched a new program to educate doctors about biosimilars.
  • FDA issued new guidance to facilitate navigation of the generic drug approval process.
• A recently finalized change to Medicare will save seniors an estimated $320 million in 2018 by reforming 340B drug payments.

Find Out More about the American Patients First Blueprint HERE

Reactions

Time for Trading Partners to Pay Their Share

US Trade Representative Robert Lighthizer issued a statement focussed on the IP rights aspect, saying:

“Our trading partners need to contribute their fair share toward pharmaceutical research and development by providing robust levels of intellectual property protection and enforcement, as well as having fair and transparent drug pricing systems. At the President’s direction, we are going to use every tool available to ensure U.S. pharmaceuticals are fairly priced around the world.”

Plan a ‘Colossal Disappointment’

Health advocates were quick to react negatively to some aspects of the President’s plan, saying it will not actually solve the problem,

James Love, president of Knowledge Ecology International, said in a statement: “The word “patent” appears three times, but only in the context of patent expiration causing drug companies to lose a lot of money. Apparently its up to USTR to raise drug prices around the world, using our government’s ‘tremendous power’ to do so.

About the only interesting thing that was said at the press conference was Alex Azar mentioning the FDA would study whether it could require drug companies to put prices in direct to consumer ads, and even that was only a promise to look into the possibility.

What a colossal disappointment for anyone who actually believed, as I did to some extent, that Trump would be motivated to do something about drug prices.

Having Azar by his side, as the chief protector of big pharma, was a telling reminder of how little Trump ever intended to ‘clean the swamp.'”

Robert Weissman, president, Public Citizen, said in a statement: “What Trump laid out is policy that Big Pharma can love – and no wonder, because Big Pharma wrote it. Trump abandoned his campaign commitment to Medicare Part D negotiation – which would save $16 billion a year or more – and shamefully aims to beat up on other countries to make them pay more, doing nothing for American consumers but forcing more rationing overseas. Those are the top lines. That’s what matters, and everything else is noise around the margins.”

Priti Krishtel, co-executive director of I-MAK, a non-profit organization of senior attorneys, scientists and health experts working to lower drug prices, issued a statement, saying:

“Trump’s drug pricing speech missed the mark on his ‘America First’ approach of scapegoating other countries for America’s ills, but he hit the nail on the head by calling out persistent abuse of the patent system by drugmakers that has caused the drug price crisis. Now what we need are specific details and a blueprint—how does the President plan to tackle patent reform? Until America has a truly healthy and competitive marketplace, prices will continue to rise—and American families will suffer.”

Leonardo Palumbo, US advocacy adviser for the Médecins Sans Frontières’ (MSF, Doctors Without Borders) Access Campaign, said in a statement: “Other countries aren’t ‘free-riding,’ and lifesaving medicines aren’t more expensive here because they cost less elsewhere. High drug prices and a lack of new and appropriate medicines is a globally-recognized concern. Every day, all over the world, MSF sees the detrimental effects of high prices—from doctors being left without antibiotics to respond treat people with drug-resistant infections, to hepatitis C medicines being rationed to the sickest patients because of their exorbitant prices.”

“The US is missing another opportunity to increase access to lifesaving medicines for people here and abroad,” he said. People everywhere deserve more than a surface-level solution to an access crisis that will only continue to get worse if the government fails to address the root problem leading to high prices and a lack of new medical products: a broken research and development system that allows companies to benefit from taxpayer-funded research while charging whatever prices they want.“

“If the US government really wants to lower drug prices they need to go further than these proposals, he said, by considering all 210 drugs approved in the US between 2010 and 2016 that either directly or indirectly benefited from publicly-funded research, they could influence prices. In addition, said Palumbo, the government “should require pharmaceutical corporations make a commitment that any product they sell that was researched and developed using taxpayer dollars like public university support or National Institutes of Health grants is actually accessible and affordable for the public.”