US President Donald Trump announced new rules that would allow Medicare to pay far less for drugs than previously and pass discounts on to patients rather than middlemen. Pharmaceutical lobbyists are vowing to fight them in court.
The first rule would end the arrangement under which middlemen – pharmacy benefit managers – reap the lion’s share of the discount to drug prices and pass those savings on to patients directly. It would also end the practice of doctors getting paid a percentage of the price of the drugs they prescribe, Trump announced on Friday at the White House.
The second, which ought to be finalized by January, would allow the US government to pay the lowest available drug price under the Most Favored Nation trade standards, whereas it currently has to pay whatever the drug companies demand, the president said.
Trump said he would also end the Food and Drug Administration’s “misguided” Unapproved Drugs Initiative (UDI), which has been exploited by drugmakers to re-patent old drugs and raise their prices substantially.
In addition to healthcare premiums savings for American seniors, the changes should save the government some $85 billion over the next five years, said Centers for Medicare & Medicaid Services Administrator Seema Verma, who spoke at the press conference alongside Trump and Health and Human Services Secretary Alex Azar.
After making the announcement, Trump, Azar and Verma left without taking any questions from the White House press corps.
Pharmacy benefit managers have been vocally opposed to the measures, which “severely alter” their business arrangements, Bloomberg reported, adding that pharmaceutical industry lobbyists are “very opposed” to price matching. Lawsuits seeking to overturn both rules are “almost guaranteed,” the outlet added, noting that federal judges have blocked Trump’s other efforts, such as mandating that drug companies include prices in advertising.
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