Published: Sat, July 13, 2019
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Trump Scraps Key Part of Plan to Lower Drug Prices

Trump Scraps Key Part of Plan to Lower Drug Prices

The Trump administration on Thursday scrapped one of its most ambitious proposals for lowering prescription medicine prices, backing down from a policy aimed at health insurers and raising the possibility of new measures focused on drugmakers.

The end of the rebate push is likely to swing discussion back toward the pricing practices of big drugmakers, and it could add momentum to other proposals that have been floated by the administration, such as tying drug costs to an index of global pharmaceutical prices.

"This fight is not over, and I will continue to push my legislation that forces these savings to be directly passed onto consumers", he said.

The rebate rule would have forced companies either to forgo the discounts or pass them onto patients enrolled in their health insurance plans and drug plans. The idea of this proposal was that the consumer would only have to pay the discounted price.

Health and Human Services Secretary Alex Azar and top White House policy advisers had disagreed over the merits of the drug rebate rule, with Azar continuing to champion it and most White House policy officials arrayed against him over concerns it would cost almost $180 billion over the next decade and could raise Medicare premiums.

The White house did not immediately respond to Reuters request for comment.

The rebate rule was estimated by the nonpartisan Congressional Budget Office to cost the government $177 billion over the next 10 years.


Braun disputed the CBO figure. The decision not to proceed with the proposal to curb industry rebates that drugmakers give to middlemen in Medicare comes after a federal judge blocked a separate rule that required drugmakers to put list prices in television ads.

White House spokesman Judd Deere said the White House hoped to collaborate with Congress on other approaches to lowering drug costs. "The Trump administration is encouraged by continuing bipartisan conversations about legislation to reduce outrageous drug costs imposed on the American people, and President Trump will consider using any and all tools to ensure that prescription drug costs will continue to decline".

President Donald Trump has for months been pushing to curtail the rebates worked out between drugmakers and third parties that manage benefits for Medicare, along with Medicaid managed care, where states contract with insurers to deliver benefits, the Wall Street Journal reports.

Overall prescription drug inflation seems to have stabilized, with more monthly declines than increases recently. Together, they complicate the administration's efforts to lower prescription drug costs, potentially undermining one of Trump's main campaign promises as he seeks a second term.

The Trump administration is considering a proposed rule that aims to bring some USA drug prices in the Medicare program in line with lower prices paid by other countries that negotiate pricing. The government's inflation index for medications also includes prices for lower-cost generics, and most consumers are anxious about high-priced brand drugs.

Trump first floated the idea of ending the rebates past year as part of a drug pricing "blueprint" aimed at bringing down costs. Azar said on Thursday that he planned to stay in his job as long as Trump wanted him there.

But without insurers getting the rebates, the bottom line would have been an increase in premiums.

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