Trump’s plan to reduce drug prices far from the “best deal”

By Judith Garber

When Alex Azar, the new Secretary of Health and Human Services, was sworn in last month, President Trump promised that Azar would help his administration “get prescription drug prices way down.”

Now it’s Trump’s chance to prove they are serious about reducing drug prices, and (unsurprisingly) his ideas are meager, underwhelming, and not at all threatening to pharma. 

The administration’s newly-released budget contains several ideas, including a pilot project for state Medicaid programs to negotiate drug prices, moving some drugs from Medicare Part B to Part D, and capping out-of-pocket drug costs for Medicare beneficiaries in the coverage gap. The proposal that has gained the most attention is making insurer discounts on prescription drugs available to Medicare beneficiaries. 

Health care policy experts are already weighing in on the budget’s potential for lowering drug prices. Kaiser Health News editor-in-chief Elisabeth Rosenthal told NPR that the new policies would help Medicare beneficiaries who are dealing with very high drug costs – but would not reduce prescription drug prices for most Americans.

“And even for Medicare patients, we’re talking about discounts on very high initial prices,” said Rosenthal, “A discount of a really high price still isn’t a very good deal.”

Another common criticism of the proposals is that they don’t put any pressure on drug manufacturers to lower prices. Instead, the cost savings would come from increasing Medicare premiums slightly for other beneficiaries, increasing Medicare spending by about $80 billion, and cutting profits for insurers and pharmacy benefit managers (PBMs). While it’s great that we’re going after middlemen like PBMs, why not also target the companies that created the absurdly high list prices  in the first place?  

Pharma has been very supportive of Trump’s budget precisely because it allows them to maintain the status quo of high prices and high profits. As journalists Katie Thomas and Reed Abelson write in The New York Times, the pharmaceutical industry are hoping these meager proposals will “act as an escape valve for patients’ anger over drug costs while preserving drug makers’ freedom to set any price they want.” 

For someone who brags about making “the best deals,” this one is a big flop.

Senior director of health programs at the Pew Charitable Trusts Allan Coukell concurred with Rosenthal about the low impact of Trump’s budget on drug prices. “None of it changes the overall trajectory” of rising drug prices, he said in Kaiser Health News.

The White House isn’t coming up with bold ideas for lowering drug prices, but there’s another place in Washington where you can find them – the 2018 Lown Institute Conference. We’ll have clinicians, activists, and policy experts talking about innovative ways we can make health care – and drug prices, specifically, more affordable.