Trump fires first salvo on drug prices

President Trump is beginning to move on high drug prices, unveiling a series of modest proposals in his budget request released Monday.

It’s the first time Trump has issued major proposals to lower drug prices since coming to the White House, despite criticizing pharmaceutical companies last year and accusing them of “getting away with murder.”

{mosads}Advocates for lowering drug costs greeted the proposals on Monday as a step in the right direction, but said they are not nearly enough.

David Mitchell, founder of the advocacy group Patients for Affordable Drugs, said the proposals are “tinkering around the edges” of the issue but do not get at the “root cause, which is the drug companies charge too much money.”

The proposals in Trump’s budget include capping out-of-pocket drug costs for Medicare enrollees, allowing up to five states to join together to negotiate drug prices in Medicaid, limiting the growth rate of certain Medicare drug payments to inflation and requiring insurers to pass drug discounts on to consumers.

Notably, the proposals do not include more sweeping changes that Trump has supported in the past, such as Medicare negotiating drug prices or allowing the importation of drugs from abroad.

Stephen Ubl, CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA), the biggest trade group for the drug industry, issued a measured response to the proposal, praising some aspects like having insurers pass discounts on to patients.

But he said “we have concerns with other elements of the budget request which appear to limit access to innovative medicines and erode market-based systems in Medicare Part D and Part B.”

Lobbyists said there are proposals in the budget that the pharmaceutical industry is likely to oppose, but none of them are drastic enough to warrant a full-scale revolt from the industry.

Furthermore, many of the changes would require congressional action, which seems unlikely to happen during an election year.

The main worry for the industry is that the administration would seek to enact some of the policy changes on its own.

One lobbyist said some proposals are “marginally bad for industry depending on one’s portfolio,” but “I wouldn’t say there’s anything transformative.”

A second lobbyist said that while industry is still sorting through the proposals, there had not been any changes that so far have provoked an, “oh my God, red alert.”

“The administration is taking great pains to avoid really challenging pharma,” said Peter Maybarduk, who advocates for lowering drug prices at the group Public Citizen.

A Department of Health and Human Services (HHS) official on Monday left the door open to some of the proposals being acted on administratively, but emphasized the need for congressional action.

“HHS will continue to look for opportunities for administrative reforms in the drug pricing space,” the official said. “But congressional action is necessary to make many of the reforms outlined in the budget permanent over the long term.”

Many of the ideas in the budget change how the pie is divided up among drug companies, insurers and patients, rather than changing the overall size of the pie by reducing prices. The cap on Medicare costs for beneficiaries, for example, or having insurers pass on discounts to consumers would not lower the overall price of drugs.

Lobbyists said the pharmaceutical industry is more likely to be worried about the proposals that more directly go after prices. One of those is allowing up to five states to negotiate Medicaid drug prices. Another is limiting the growth of payments under Medicare Part B, which covers drugs administered in doctors’ offices, to no more than inflation.

The Part B proposal is similar in some ways to a proposal to lower drug prices under former President Obama that was ultimately dropped in the face of fierce opposition from the pharmaceutical industry and medical providers.

“There are some ideas we think are positive, but they’re not coupled with the kind of large reforms that are necessary,” said Maybarduk, of Public Citizen.

Rachel Sachs, a professor at Washington University in St. Louis who does work on drug pricing issues, said the proposals would provide relief for some Medicare and Medicaid beneficiaries, but do almost nothing for the majority of Americans who get insurance through their jobs and face high drug costs.

Sachs said the proposals did not seem to match Trump’s rhetoric about drug companies.

“This is a very pharma-friendly set of proposals in many ways,” she said.