President Trump announced on Thursday that he's introducing an effort to make some prescription drug prices fairer and more comparable to what they are in other countries.
Foreign countries and drug companies, the president declared in a speech at the Department of Health and Human Services Thursday, have been taking advantage of Americans consumers for too long. The regulation the administration is proposing would set up what's called an "international pricing index" that would be used as a reference point for helping set up prices for drugs paid for through Medicare Part B.
"Today, we are here to announce another bold and historic action to bring down the price of prescription drugs," the president said. "With the action I am unveiling today, the United States will finally begin to confront one of the most unfair practices — almost unimaginable that it hasn't been taken care of long before this — that drives up the cost of medicine in the United States."
The president, as he often does in other policy areas, focused on how "unfair" the current system is to patients.
"At long last the drug companies and foreign countries will be held accountable for how they rigged the system against American consumers," Mr. Trump said. "This is a revolutionary change. Nobody's had the courage to do it or they just didn't want to do it. And this is a change for the people. This is not a change for industry or for companies or for pharma. This is a change for the people. It will be substantially a reduction in drug prices for our people and our senior citizens. Tremendous, tremendous difference."
The commander-in-chief also said his administration will soon be announcing some things that he claimed will have a tremendous impact on health care costs, although he didn't specify what he meant by that.
Health care is high among voters' election-year concerns — particularly for Democrats. Mr. Trump has promised sweeping action to attack drug prices, both as president and when he campaigned for the White House.
In advance of the speech, HHS released a report that found U.S. prices for the top drugs administered in doctor's offices are nearly twice as high as in foreign countries. The list includes many cancer drugs. Medicare pays directly for them under its "Part B" coverage for outpatient care.
HHS Secretary Alex Azar on Twitter said "the current international pricing system has put America in last place." In most other economically advanced countries, governments take a direct role in setting drug prices. That's something the United States traditionally has avoided, and Republicans in particular are loath to do.
Azar said Medicare spent about $8 billion more for drugs in the study than if the prices paid by the program were scaled to international prices. Any push to dramatically lower prices here would meet resistance not only from drugmakers but from doctors, two of the most powerful lobbies.
Mr. Trump has harshly criticized the pharmaceutical industry, once asserting that the companies were "getting away with murder," a comment that sent pharmaceutical stocks tumbling. But it's largely been business as usual for drugmakers even as the president has predicted "massive" voluntary price cuts.
A recent Associated Press analysis of prices for brand-name drugs found far more increases than cuts in the first seven months of this year. The analysis found 96 price hikes for every price cut. The number of increases slowed somewhat and they were not quite as steep as in past years, the AP found.
As a candidate, Mr. Trump called for using Medicare's clout to negotiate prices. As president, he's had to shelve that idea since it's a nonstarter for congressional Republicans and even Azar.
Instead the White House has opted for a complex strategy that incorporates some 50 proposals to try to change the workings of a market that is legendary for being opaque.
Some of those ideas have advanced.
Over industry objections, the administration is moving to require drugmakers to disclose prices in their consumer advertising. And Mr. Trump signed into law a bill that outlaws so-called "gag clauses" preventing pharmacists from telling customers when they could save money by paying cash instead of using their insurance. The Food and Drug Administration is approving generics at a record pace.
In another warning shot at the industry, the FDA is studying ways to allow lower-cost drug imports from abroad in the event of U.S. price spikes.
But Medicare and Medicaid changes are more difficult to carry out, since congressional approval would be needed for any major policy shifts.
The White House also seems committed to squeezing middlemen called "pharmacy benefit managers," companies that run prescription coverage for insurers and employers. The benefit managers say the rebates they win from drugmakers get returned to consumers in the form of lower insurance premiums. But administration officials say rebates add hidden costs to the system and in effect encourage drug companies to price higher to begin with.