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Drug prices: Trump reveals controversial new rule in latest attempt to deliver on campaign promise

If the two measures announced on Friday survive the legal challenges, they will radically transform the national drug pricing system. One will make Medicare pay the same price for some expensive prescription drugs as other developed countries, the “most-favored-nation price.”

The other will effectively ban drug manufacturers from giving discounts to pharmacy managers and insurers – a radical change in the way many drugs are valued and paid for in Medicare and Medicaid. Instead, pharmaceutical companies will be encouraged to pass on discounts directly to pharmacy patients.

During a 22-minute press conference, Trump reviewed the list of laundering drug price efforts his administration undertook during his four years in office. However, many remain at the proposal stage, have been suspended by the courts or have had little impact. Prices continue to rise, although the pace has slowed during his presidency.

He also hinted that he may not be in office next year. “I just hope they keep it. I hope they have the courage to keep it, because the powerful drug lobby, Big Pharma, is putting pressure on people that you wouldn̵

7;t believe,” Trump said, referring to one of the rules.

The new rules come just days after Pfizer and Moderna announced the results of their coronavirus vaccination studies. The president accused companies earlier Friday of withholding news until after the election in response to efforts to cut drug prices.

Based on Medicare’s reimbursement of drug prices in other countries

The rules stem from a series of executive orders issued by Trump in July and September.

The most-favored-nation rule allows the United States to take advantage of discounts agreed by other countries – as Congress has banned Medicare from negotiating with drug manufacturers. Other states usually pay far less for drugs, largely because their governments often set the price – which is contrary to Republican loyalty to the free market system.

Although Trump has blamed socialist health care systems that exist in other countries and attacked his Democratic rivals for seeking to apply such a setting here, he celebrated linking US prices to lower partner countries’ spending.

“In short, with this rule, the Republican leader supports the proposal that Americans should not pay higher prices than citizens of other countries – and he is ready to approve the adoption of European price controls to reduce prices here,” tweeted Rachel Sachs , Associate Professor of Law at the University of Washington.

The model, which will run for seven years, will test the nation’s most-favored-nation payment for 50 Medicare Part B drugs used in doctors’ offices. These drugs account for about 73% of the cost of Part B drugs. This will replace the current system, which pays the average selling price plus a 6% surcharge.

The rule, which takes effect in early 2021, could save patients $ 28 billion.

The president’s July executive order extended the initiative to include some Part D drugs sold in pharmacies, but Friday’s rule only refers to Part B drugs. The Part D version is under development, said Siema Verma, administrator of Medicare and Medicaid Services Centers.

For the first time, Trump outlined the proposal for an International Price Index to determine the levels of reimbursement of Medicare drugs for their costs in other countries in October 2018, seeking to strengthen the position of Republicans in health care days before the midterm elections. He called for the “target price” to be 126% of the average value of what other countries pay.

Targeting discounts to consumers

The second rule will effectively prohibit drug manufacturers from giving discounts to pharmacy managers and insurers – a radical change in the way many drugs are valued and paid for in Medicare and Medicaid. Instead, pharmaceutical companies will be encouraged to pass on discounts directly to pharmacy patients.

On Friday, HHS said patients could save nearly 30%. This will affect patients whose out-of-pocket costs are tied to the price of a medicine – for example, those who have to take out a deductible, use a medicine that is not covered by their insurance, or pay for co-insurance that is tied to the list price. . Those with high drug costs will benefit the most.

However, the Trump administration withdrew from issuing the rule last year after it was found to increase spending on the elderly and the federal government.
The proposed rule was expected to increase Medicare premiums, while saving money for only 30% of Medicare Part D participants, who spend heavily on drugs, according to the administration’s 2019 estimate. That would also cost the federal government $ 177 billion. Dollars for 10 years, according to the Congressional Budget Service.
Trump’s July executive order calls for the rule to be introduced, but only if it doesn’t increase spending. Health and Humanitarian Services Secretary Alex Hazard said on Friday that there is a wide range of actuarial valuations, some of which suggest the rule will lead to savings. He does not believe that the measure will increase premiums based on trends in discounts and premiums over the past 15 years.

Experts have disputed this claim.

“Despite a real analysis of the effect of this rule on costs and premiums showing a HUGE increase, Hazard says it won’t matter because he just knows,” Stacy Dusecina, an associate professor of health policy at the university’s medical center, wrote on Twitter. Vanderbilt.

It will enter into force in early 2022.

Immediate opposition from the industry

Groups in the pharmaceutical industry immediately criticized the rules, promising to consider all options for suspending the measures.

The PhRMA, the drug manufacturers’ lobby group, said the most-favored-nation rule would jeopardize medical innovation in the United States and harm patients.

“This goes against the logic that the administration is blindly pursuing a ‘most-favored-nation’ policy that gives foreign governments the upper hand in determining the value of medicines in the United States,” said PhRMA CEO Stephen J. Убл. “History has shown that when governments take unilateral action to set prices, it disrupts patients’ access to treatment, discourages investment in new drugs and threatens jobs and economic growth.

Industrial organizations representing insurers and pharmacy managers violated the rebate rule.

“Simply put, [Health and Human Services] The secretary’s decision to apply the pre-withdrawn rebate rule will dramatically increase Medicare Part D beneficiary premiums and taxpayer costs, “said JC Scott, CEO of the Pharmaceutical Care Management Association, which represents pharmacy care managers.” The PCMA will investigate all possible litigation to stop the Medicare Part D program entry into force and destabilization, on which millions of beneficiaries rely. “

Democratic leaders of parliament, who have set out their own plan to cut drug prices, have struck a blow at Trump.

“As the coronavirus spreads across the country, President Trump spends his twilight days in the office pushing half-baked proposals that are likely to be rejected in court as he desperately wants to cover up his administration’s failure to actually cut drug prices.” said Energy and Trade Committee Chairman Frank Palown Jr. of New Jersey and Ways and Means Commission Chairman Richard Neal of Massachusetts.

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