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Medicare Pays Far More than Other Countries for Drugs, Government Finds Trump Proposes to Lower Drug Prices by Basing Them on Other Countries’ Costs
(about 2 hours later)
WASHINGTON — President Trump was poised on Thursday to propose new steps to hold down prescription drug prices after a government study found that Medicare was paying 80 percent more than other advanced industrial countries for some of the most costly physician-administered medicines. WASHINGTON — President Trump proposed on Thursday that Medicare pay for certain prescription drugs based on the prices paid in other advanced industrial countries — a huge change that would save money for the government and for millions of Medicare beneficiaries.
As part of a demonstration project covering half the country, Medicare would establish an “international pricing index” and use it as a benchmark in deciding how much to pay for drugs covered by Part B of Medicare.
“This is a revolutionary change,” Mr. Trump said in a speech on Thursday at the Department of Health and Human Services. “Nobody’s had the courage to do it, or they just didn’t want to do it.”
Mr. Trump said his plan took aim at “global free riding” that forces Americans to subsidize lower drug prices in other countries.
“Americans pay more so that other countries pay less,” Mr. Trump said.
Mr. Trump’s announcement came after his administration released a government study that found that Medicare was paying 80 percent more than other advanced industrial countries for some of the most costly physician-administered medicines.
It is also part of a flurry of initiatives emerging from the White House ahead of next month’s midterm elections when Democrats are threatening to take control of the House — and possibly the Senate. Democrats have focused their campaigns on health care, hammering Republicans on the high cost of prescription drugs and asserting that Republicans would undo protections for people with pre-existing medical conditions — one of the most popular provisions of the Affordable Care Act.
On Thursday, the Trump administration offered an answer.
“The current international drug pricing system has put America in last place,” Alex M. Azar II, the secretary of health and human services, said in unveiling the report on Thursday.“The current international drug pricing system has put America in last place,” Alex M. Azar II, the secretary of health and human services, said in unveiling the report on Thursday.
The administration’s latest initiative comes near the end of midterm election campaigns in which Democrats have sought to score political points by asserting that Republicans would undo protections for people with pre-existing medical conditions — one of the most popular provisions of the Affordable Care Act. Democrats have also campaigned on the high cost of prescription drugs. Democrats were skeptical.
Mr. Trump was expected to cite the government report in a speech on Thursday. The report compares prices charged by drug manufacturers in the United States and 16 other countries for 27 drugs that are covered by Part B of Medicare. “It’s hard to take the Trump administration and Republicans seriously about reducing health care costs for seniors two weeks before the election when they have repeatedly advocated for and implemented policies that strip away protections for people with pre-existing conditions and lead to increased health care costs for millions of Americans,” said Senator Chuck Schumer of New York, the Democratic leader, said.
Mr. Trump cited the government’s international drug-pricing report in his speech on Thursday. The report compares prices charged by drug manufacturers in the United States and 16 other countries for 27 drugs that are covered by Part B of Medicare.
“Over all,” the report said, “prices and reimbursement rates for Part B drugs are significantly higher for U.S. providers than purchasers outside the U.S. Medicare could achieve significant savings if prices in the U.S. were similar to those of other large market-based economies.”“Over all,” the report said, “prices and reimbursement rates for Part B drugs are significantly higher for U.S. providers than purchasers outside the U.S. Medicare could achieve significant savings if prices in the U.S. were similar to those of other large market-based economies.”
In a Twitter post, Mr. Azar said, “Medicare was found to be paying the highest price for 19 out of the 27 drugs studied.” In only one case was Medicare paying less than the international average, he said.In a Twitter post, Mr. Azar said, “Medicare was found to be paying the highest price for 19 out of the 27 drugs studied.” In only one case was Medicare paying less than the international average, he said.
Among the drugs included in the study were Aranesp, Avastin, Herceptin, Keytruda, Lucentis, Neulasta, Opdivo and Rituxan.Among the drugs included in the study were Aranesp, Avastin, Herceptin, Keytruda, Lucentis, Neulasta, Opdivo and Rituxan.
The report was notable for several reasons.The report was notable for several reasons.
It uses foreign drug prices as a reference or benchmark to judge prices in the United States. In many foreign countries, officials negotiate prices with drug manufacturers. Republicans in this country have opposed such negotiations, fearing Medicare could eventually dictate prices or restrict access to drugs deemed to be too expensive. It uses foreign drug prices as a reference or benchmark to judge prices in the United States. In many foreign countries, officials negotiate prices with drug manufacturers. While Democrats have long pushed for such negotiations, Republicans in this country have blocked them, fearing Medicare could eventually dictate prices or restrict access to drugs deemed to be too expensive.
And while Mr. Trump campaigned for president on the promise of allowing the government to negotiate drug prices, he has since backed away from that position. Mr. Trump campaigned for president on the promise of allowing the government to negotiate drug prices, but then backed away from that position when he unveiled his first drug-price proposals last spring.
Other countries “use their national health systems to negotiate lower prices in exchange for market access,” the Trump administration said in the report issued on Thursday.Other countries “use their national health systems to negotiate lower prices in exchange for market access,” the Trump administration said in the report issued on Thursday.
Many nations also consider the price of a medicine in other countries when establishing prices for their own citizens. Drug companies and other critics dislike such “international reference pricing.” If adopted here, they say, it would, in effect, import drug price controls from other countries to the American market.Many nations also consider the price of a medicine in other countries when establishing prices for their own citizens. Drug companies and other critics dislike such “international reference pricing.” If adopted here, they say, it would, in effect, import drug price controls from other countries to the American market.
Medicare generally pays 106 percent of the “average sales price” for drugs that patients receive by infusion or injection in doctors’ offices. Medicare drug spending has been growing rapidly — at an average rate of about 9.5 percent a year since 2009, according to the Medicare Payment Advisory Commission, an independent agency that advises Congress.Medicare generally pays 106 percent of the “average sales price” for drugs that patients receive by infusion or injection in doctors’ offices. Medicare drug spending has been growing rapidly — at an average rate of about 9.5 percent a year since 2009, according to the Medicare Payment Advisory Commission, an independent agency that advises Congress.
The Trump administration said the current payment formula could provide financial incentives for some doctors and hospitals to use “the highest priced clinically beneficial product.”The Trump administration said the current payment formula could provide financial incentives for some doctors and hospitals to use “the highest priced clinically beneficial product.”
The new report acknowledged many “limitations” in the data used for its international price comparisons. The formulation of drugs, their dosage and strength may differ from country to country, it said.The new report acknowledged many “limitations” in the data used for its international price comparisons. The formulation of drugs, their dosage and strength may differ from country to country, it said.
Prices cited in the study “may not accurately reflect the actual amount paid in the U.S. or abroad,” because they generally do not show the effects of rebates offered by drug manufacturers, the report said.Prices cited in the study “may not accurately reflect the actual amount paid in the U.S. or abroad,” because they generally do not show the effects of rebates offered by drug manufacturers, the report said.
Obama administration officials were also troubled by the rapid growth of spending for drugs covered by Part B of Medicare. In March 2016, they proposed a nationwide experiment to reduce payments for many of these drugs. But they scrapped the plan nine months later after it was criticized by pharmaceutical companies, doctors, patients and members of Congress from both parties, who said it could jeopardize access to important medicines.Obama administration officials were also troubled by the rapid growth of spending for drugs covered by Part B of Medicare. In March 2016, they proposed a nationwide experiment to reduce payments for many of these drugs. But they scrapped the plan nine months later after it was criticized by pharmaceutical companies, doctors, patients and members of Congress from both parties, who said it could jeopardize access to important medicines.
About two-thirds of Part B drug spending is for biotechnology drugs known as biologics.About two-thirds of Part B drug spending is for biotechnology drugs known as biologics.
Countries included in the Trump administration’s drug price comparisons, besides the United States, were Austria, Belgium, Canada, the Czech Republic, Finland, France, Germany, Greece, Ireland, Italy, Japan, Portugal, Slovakia, Spain, Sweden and the United Kingdom.Countries included in the Trump administration’s drug price comparisons, besides the United States, were Austria, Belgium, Canada, the Czech Republic, Finland, France, Germany, Greece, Ireland, Italy, Japan, Portugal, Slovakia, Spain, Sweden and the United Kingdom.