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Trump Proposes Widespread Changes to Reduce Drug Prices

Jason Harris
Published: Friday, May 11, 2018

In a move that drew cautious responses from oncology groups and patient advocates, President Donald Trump announced a sweeping “blueprint” to lower prescription drug costs, promising to expand access to generic drugs and biosimilars and remove incentives that keep drug prices high.

, includes 50 different actions and proposals based on 4 key strategies:
  • Increase competition
  • Encourage drug price negotiation
  • Create incentives to lower list prices
  • Lower out-of-pocket costs
Azar said efforts would also be made to boost the availability of and awareness about biosimilars, which are similar-to-but-cheaper than brand-name products. “We need a vital and vibrant generic industry and generic drug market,” he said. “We need to foster and nurture a new, competitive biosimilar drug market.” Just a handful of biosimilars—defined as biological products that are similar or interchangeable with an FDA-licensed biological product—have been approved for cancer treatment by the FDA.

The blueprint does not include a proposal allowing Medicare to directly negotiate drug prices, a promise Trump campaigned on in 2016. Instead, the administration wants to move high-cost drugs into the Medicare Part D program and give plan sponsors “significantly” more power to negotiate with manufacturers.

The administration is considering rules instituting site neutrality that would eliminate or reduce facility fees charged for drugs issued at hospitals and hospital-owned clinics. Site neutrality rules could also eliminate differences in inpatient and outpatient Medicare payment policies for drugs.

An ASCO spokesperson said the organization is reviewing the administration’s plan and declined to make a statement. A spokesperson with the American Cancer Society said in an email that the group was also reviewing the plan and could not comment on specifics.

Earlier in the day, Chris Hansen, president of the American Cancer Society Action Network (ACS CAN), released a statement saying that prescription drug prices are only 1 cost factor in a complex healthcare system. “Keeping health care affordable for cancer patients and other Americans requires a comprehensive examination of all cost drivers,” he said. “ACS CAN will continue its advocacy efforts to ensure patients have access to quality, affordable health care coverage for all their needs, including prescription drugs.”

The Community Oncology Alliance (COA) issued a statement saying that it “strongly supports” efforts to reduce drug prices. However, the organization criticized the administration because the plan leaves in place a 2% sequester cut made to Medicare reimbursement for cancer drugs in 2013.

“Today, President Trump has proposed several important initiatives to lower drug prices that align perfectly with COA’s ongoing work to advance meaningful, patient-centered solutions aimed at making cancer care less costly and more effective,” said executive director Ted Okon. “However, it is really disturbing that the blueprint released today does not address the Medicare sequester cut to drug payments that is fueling higher costs and cancer drug prices. All the sequester cut to Medicare drug payments for cancer drugs has produced is less access to cancer treatment, higher costs for patients and Medicare, and increased drug prices. It has to be stopped now.”

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