cloudy
Sunday December 16th, 2018 12:37PM

On drug costs, modest steps follow Trump's big promises

By The Associated Press
Related Articles
  Contact Editor

WASHINGTON (AP) — President Donald Trump makes big promises to reduce prescription drug costs, but his administration is gravitating to relatively modest steps such as letting Medicare patients share in manufacturer rebates.

Those ideas would represent tangible change and they have a realistic chance of being enacted. But it's not like calling for Medicare to negotiate drug prices.

Skeptics say the overall approach is underwhelming, and Trump risks being seen as an ally of the powerful pharmaceutical industry, not its disrupter.

The White House Council of Economic Advisers has released a 30-page strategy for reducing drug costs, and it calls current policies "neither wise nor just." The plan, outlined before Trump releases his new budget proposal Monday, focuses mainly on Medicare and Medicaid changes, along with ideas for speeding drug approvals and fostering competition.

"Despite promises to drastically lower prices the mix of proposed changes does not appear likely to do so, even though there are some constructive proposals," said John Rother, CEO of the National Coalition on Health Care, an advocacy group whose members include consumer organizations, medical societies, hospitals and insurers.

Polls show the high cost of drugs is a top concern of Americans, regardless of political leanings. In his State of the Union speech, Trump seemed to foreshadow major change, saying "fixing the injustice of high drug prices" is a top priority this year.

"And prices will come down substantially," Trump added. "Watch."

As a candidate, Trump advocated Medicare negotiations and he called for allowing consumers to import lower-priced medicines from abroad. But the White House strategy paper veers away from such dramatic steps. His new health secretary, Alex Azar, was a top executive at pharmaceutical giant Eli Lilly.

Medicare negotiations and drug importation are unacceptable to the drug industry, which has spent tens of millions of dollars since Trump's inauguration to influence the Washington conversation around drug prices, including a high-profile TV advertising campaign portraying its scientists as medical trailblazers.

The White House strategy largely sidesteps the question of whether drugmakers set their prices too high to start with. Rather, it recommends changes to policies that the administration believes unwittingly lead to higher prices, and suggests ways to speed drugs to market and increase competition.

It takes aim at foreign governments that dictate what drug companies can charge their own citizens. Trump often has noted that the same medications Americans struggle to pay for can be bought for much less abroad. The White House report examined 35 economically advanced countries, and found that U.S. consumers and taxpayers pay for more than 70 percent of drug company profits that fund innovation.

"Other nations are free-riding, or taking unfair advantage," according to the review.

The industry defends its pricing by saying companies have to recoup considerable research and drug development costs within the limited window when brand drugs are protected from generic competition. But examples of profit-seeking abound.

An investigation by Sens. Charles Grassley, R-Iowa, and Ron Wyden, D-Ore., in 2015 found that the makers of the breakthrough hepatitis C drug Sovaldi decided to charge roughly $1,000 per pill even though the company's own analysis showed a lower price would allow more patients to be treated. Gilead Sciences disagreed with the senators' conclusion that it put profits before patients.

The White House strategy recommends:

—working with states to revise Medicaid rules so manufacturers don't have an incentive to set artificially high prices due to the rebates they provide the program for low-income people.

—changing the way Medicare pays for drugs administered in a doctor's office so Medicare doesn't reimburse based on a fixed percentage of a drug's cost. Critics say the current system creates an incentive for doctors to prescribe more expensive medications. The Obama administration proposed a similar change, but had to back off.

—changing a requirement that insurers in Medicare's prescription program cover at least two different medications in each broad class of drugs. In some cases, that can tie the hands of insurers trying to negotiate lower prices.

—requiring insurers to share rebates from drug companies with patients. Drugmakers use the rebates to help gain market share. Insurers say they plow the money into reducing premiums. But patient copayments are usually based on the full price of the drug, before rebates. The issue is a major source of friction between drug companies and insurers.

—revising the Food and Drug Administration's drug review and approval process to promote competition.

Many of the ideas can be pursued by the administration through rule-making, which means Trump can drive change without a balky Congress. But whether that translates into a big hit with the public is unclear. There's no estimate from the White House of the potential impact on prices.

Financial analyst and former drug company executive Richard Evans said the administration plan would help bring down costs, but not to the same degree as giving Medicare a direct role in setting prices.

"Convincing the average voter who is upset about drug prices that this is the path to righteousness is going to be a hard sell," Evans said.

  • Associated Categories: Associated Press (AP), AP National News, AP Online National News, Top General short headlines, AP Online Headlines - Washington, AP Health, AP Business, AP Business - Economy, AP Business - Industries, AP Business - Financial Services, AP Business - Health Care, AP Business - Personal Finance
© Copyright 2018 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
On drug costs, modest steps follow Trump's big promises
President Donald Trump has made big promises to reduce prescription drug costs, but his administration is moving toward relatively modest steps such as letting Medicare patients share in manufacturer rebates
9:29AM ( 3 minutes ago )
The Latest: Switzerland wallops Korea 8-0 in women's hockey
Alina Muller scored a hat trick in the first period and added a fourth goal in the second as Switzerland shut out Korea 8-0 for a big dose of hockey reality for the Koreans' extraordinary Olympic debut
9:28AM ( 4 minutes ago )
Come visit: South Korea's leader invited to North Korea
South Korean President Moon Jae-in received an invitation to visit the North during the most significant diplomatic encounter between the rivals in years
9:26AM ( 6 minutes ago )
Associated Press (AP)
Pence upstaged by 2 Koreas' efforts to warm ties
Vice President Mike Pence's efforts to keep North Korea from stealing the show at the Olympics has proved to be short-lived, quickly drowned out by the images of the two Koreas marching and competing together
8:03AM ( 1 hour ago )
Trump won't declassify Democratic memo on Russia probe
President Donald Trump won't declassify a memo drafted by Democrats that counters GOP allegations about abuse of government surveillance powers
8:02AM ( 1 hour ago )
Trump defends former aide after abuse claims bring criticism
President Donald Trump is defending former aide Rob Porter without any nod to the women who have accused Porter of physical and emotional abuse
6:54AM ( 2 hours ago )
AP Online Headlines - Washington
False alarms highlight weaknesses in national alert system
Last month's bogus ballistic missile alert in Hawaii and a tsunami foul-up this week have highlighted trouble spots in the system that warns Americans about dangerous weather and other emergencies
8:41AM ( 51 minutes ago )
This week in odd news: Lettuce lizard; Dog and pony show
This week in odd news: Woman says store-bought lettuce had a 3-inch lizard in it; Snow go if it's two days old: Romanian study finds it's safe to eat snow that's a half-day old; Woman finds neighbor's dog taking a ride her one-eyed pony
8:27AM ( 1 hour ago )
The Latest: Officer in Canada prime minister motorcade hurt
A crash of motorcycle officers accompanying Canadian Prime Minister Justin Trudeau on a visit to California sent one officer to the hospital, but Trudeau's vehicle was not involved and he wasn't hurt
6:28AM ( 3 hours ago )
AP Business
US stocks struggle to stabilize after entering 'correction'
Stocks struggle to stabilize in unsteady trading after marked enters 'correction'
3:35PM ( 17 hours ago )
Risking Israeli dispute, Lebanon signs deal with 3 oil firms
Lebanon has signed a deal with an international consortium to start exploratory offshore drilling for oil and gas in what the country hopes will help its struggling economy
1:11PM ( 20 hours ago )
Hungary says Romanian gas deal would end Russia's monopoly
Hungary's prime minister says a forthcoming deal to import natural gas from neighboring Romania means that the "age of the Russian gas monopoly in Hungary is ending."
12:03PM ( 21 hours ago )
AP Business - Industries
Teva chief reports 'strong progress' in restructuring plan
The chief executive of Teva Pharmaceuticals says he is making "strong progress" on the company's restructuring plan, but has acknowledged the generic drug giant faces a challenging 2018
1:09PM ( 1 day ago )
LA Times buyer is a basketball-loving biotech billionaire
The man buying the Los Angeles Times is a 65-year-old physician-entrepreneur described by Forbes Magazine as "America's richest doctor."
2:43PM ( 2 days ago )
$300M health care system cost to protect religious rights
$300M health system cost for Trump administration effort to protect rights of clinicians who object to abortion
3:11PM ( 4 days ago )
AP Business - Health Care
Even 'safe' bond investments falter as markets tumble
Stocks aren't the only thing dropping. Bonds, which are supposed to be the safe part of your portfolio, are faltering, too
5:19PM ( 16 hours ago )
Unlimited movie-theater deal could be too good to survive
It sounds like a movie lover's dream: $10 a month and you can go the multiplex every day. But it's not clear it can last
1:52PM ( 19 hours ago )
Investors back Greek bond issue as bailout end approaches
Investors have bought strongly into a bond issue designed to help wean Greece off its international rescue loan program, in what officials see as an endorsement of efforts to right the country's battered economy
2:34PM ( 1 day ago )
AP Business - Personal Finance
Polish adviser says Israel wants 'monopoly on the Holocaust'
An adviser to Poland's president has said that Israel's reaction to a law criminalizing some statements about Poland's actions during World War II stems from a "feeling of shame at the passivity of the Jews during the Holocaust."
9:01AM ( 31 minutes ago )
Come visit: South Korea's leader invited to North Korea
South Korean President Moon Jae-in received an invitation to visit the North during the most significant diplomatic encounter between the rivals in years
8:52AM ( 40 minutes ago )
Israel downs Iranian drone and strikes Syria, F-16 crashes
The Israeli military says it has shot down an Iranian drone that infiltrated the country and has struck Iranian targets in Syria that launched it
8:47AM ( 45 minutes ago )
Loch leads, Mazdzer in pursuit in Olympic luge competition
Germany's Felix Loch is halfway home in his quest for a third consecutive Olympic men's luge gold medal
8:47AM ( 45 minutes ago )
The Latest: Koreans manage 3 shots at goal in 20 minutes
The Koreans managed all of three shots in the first 20 minutes of their historic women's hockey game in the Olympics, and a North Korean had one of them
8:41AM ( 51 minutes ago )