What the Media Is Missing on Drug Pricing

July 18, 2018

By: Dan Best, Senior Advisor to the Secretary for Drug Pricing Reform

Summary: 

HHS has responded, implementing changes and reforming regulatory pathways to lower the price of prescription drugs.

In the past week, two of the world’s largest pharmaceutical companies announced that they will postpone the kind of broad, steep price increases that have characterized America’s market for prescription drugs for far too long. It is hard to imagine, in light of this news, that some in the media are still claiming that the Trump Administration’s plan for reforming drug pricing isn’t delivering.

Yet that’s the tired story many are sticking to, and they’re leaving out crucial facts in the process.

Since President Trump announced his comprehensive proposal to put patients first in May, HHS has responded, implementing changes and reforming regulatory pathways to lower the price of prescription drugs.

The president’s American Patients First blueprint outlined a series of proposals to change how Americans pay for prescription drugs. It sought public comment on them, with the window closing on Monday at midnight. Stakeholder input was necessary because of the dramatic changes we’re contemplating for our country’s pharmaceutical system, but it hasn’t stopped us from taking action.

HHS has already been implementing changes, using our administrative powers and sending legislative text to Congress to act where necessary.

Just last week, HHS proposed new Medicare Part B rules that will save seniors and taxpayers money on some new drugs. Medicare has overpaid for drugs in this space for years, and under President Trump, that’s finally going to stop. Whether the media chooses to notice or not, senior citizens who use these drugs are going to notice the savings in their medical bills. 

Yesterday, FDA Commissioner Scott Gottlieb released new guidance on how companies can give consumers easier access to a broader selection of non-prescription drugs, which can often be more convenient and potentially cheaper.

This afternoon, the FDA is announcing an eleven-point action plan to encourage a competitive market for biosimilars. These are like generic drugs, but for complicated treatments called biologics, such as drugs to treat cancer and anemia. Unfortunately, branded drug companies have abused the rules in this space to hold up competition, costing American consumers billions. The Trump Administration is finally going to bring real competition to this market, which represents fully 40 percent of American drug spending, and deliver on efforts begun by Congress years ago.

Another key area of action is working with states to help them get better prices on drugs in the Medicaid program. The President, Secretary Azar, and CMS Administrator Seema Verma are eager to help states engage in tougher negotiation with pharmaceutical companies. The President’s budget proposed giving states the opportunity to participate in pilot negotiation programs like the one recently proposed by Massachusetts. We have provided legislative text to Congress to make this happen.

Unfortunately, as mentioned in a recent New York Times editorial, Massachusetts came forward with a proposal that CMS was not prepared to approve. The state asked for new negotiation powers, but wanted to continue receiving the full amount of their rebates from manufacturers called for under federal law. CMS had to turn down this idea not because we don’t support state negotiation, but because it would have resulted in an imbalance in negotiating power.

This week, we will see more action to reform drug pricing in America than we have seen in a number of years. As someone who has worked in various parts of the drug market for decades, I have never seen a time of change like this.

President Trump has a strategic, comprehensive approach to driving the changes needed, and the results will keep coming. The weeks and months to come will be a wakeup call for anyone who still doubts President Trump’s ability to fix a broken system and get better deals for the American people.

https://www.hhs.gov/blog/2018/07/18/what-the-media-is-missing-on-drug-pricing.html