Trump’s Drug-Pricing Policies Fail to Move the Needle

Lowering drug prices may be a top initiative for the Trump administration, but little progress has been made and some voters lack confidence in the president’s ability to keep his promise.

President Trump with Health and Human Services Secretary Alex Azar (left) and chief of staff John Kelly at the White House on May 30
AP Photo/Andrew Harnik
Oct. 18, 2018, 8 p.m.

In the final weeks before Election Day, the Trump administration has brought the spotlight back to one of its key health policy initiatives: lowering drug prices.

The White House’s latest move involves a proposal that would require drug companies to include the list price of their product in their TV ads. This came just one week after President Trump signed into law a ban on pharmacy “gag clauses,” which prevent pharmacists from informing patients when their drug is cheaper without insurance.

“Along with a very Republican Congress, I am delivering on my promise to lower drug prices,” said Trump last week while signing the legislation. “And I really do believe Democrats want to do that too, very much.”

Democratic candidates have put health care, including drug prices, front and center on the campaign trail, while Republicans have struggled to excite voters on this issue. And House Minority Leader Nancy Pelosi has named lowering drug prices as part of the Democratic agenda if they take the House, according to an interview with Politico this week.

Despite making this a central part of his 2016 presidential campaign and releasing a blueprint on the issue in May, most voters are not confident that Trump will lower prices. A September Kaiser Family Foundation poll found that a majority of voters, roughly 61 percent, were not confident that they would pay lower prices under this administration. These numbers were the same before Trump released his blueprint, according to the poll.

Health experts told National Journal that the administration has taken steps in the right direction by requiring more drug-price transparency, among other actions, but Trump’s promise to lower drug prices has not been fulfilled. A recent Associated Press analysis found that through the end of July, there were 4,412 brand-name drug-price increases and 46 price cuts.

“These are not the kinds of policies that will have a dramatic and immediate effect on consumer spending,” said Dan Mendelson, founder of Avalere Health. “The things that they’ve done so far, you’re not going to see that take drug markets by storm and alleviate the issues that are leading to all of the interest in this policy in the election.”

Along with the recent efforts to increase drug-price transparency, the administration also has given Medicare Advantage plans the ability to use “step therapy” to manage Part B drugs. This will allow them to start beneficiaries on preferred, possibly less-costly drugs and then switch to more expensive therapies if needed. These plans are also allowed to manage drugs covered by different parts of Medicare.

Lauren Aronson, executive director for the Campaign for Sustainable Rx Pricing, said the administration deserves credit for the work it has been doing in this area, and pointed to the Medicare Advantage policy as a move that will have an impact on beneficiary costs.

"To move major markets takes quite a bit of time and so I think the administration is doing a lot here to try to move the needle," she said.

Health and Human Services Secretary Alex Azar said in remarks at the National Academy of Medicine on Monday that these actions are just the “tip of the iceberg” and “we will go beyond the four corners of the blueprint if we need to.”

Mendelson said there is an urgency to create a robust market in the U.S. for biosimilar drugs, which are highly comparable to an already approved biological product and do not have any clinically meaningful differences. But earlier this month, Momenta Pharmaceuticals announced it is reducing investments into biosimilars and cutting its staff in half. Merck also decided to stop commercializing its insulin-biosimilar product Lusduna, but said it remains committed to its other biosimilar assets.

“Look at what’s happening in Europe with biosimilars progressing rapidly and saving consumers billions of dollars, and it’s remarkable,” said Mendelson. “The comparison to the U.S. market is pretty remarkable ... and it’s urgent because companies are starting to run away from biosimilars in this country. If they can’t make it work, they’re just not going to try.”

Preexisting-condition protections in Obamacare and the Republican effort to repeal the law have dominated messaging on health care policy this election cycle, rather than drug pricing, noted Molly Reynolds, a fellow in governance studies at the Brookings Institution. As voters will not see direct impacts on their wallets in the final weeks before election day, the issue of drug pricing will largely stay on the sidelines, she added.

“So much of the health care conversation, particularly in swing congressional districts where there are vulnerable Republican incumbents, is about ‘Well, did so-and-so vote for Obamacare repeal last summer?’” she said. “That’s an easy, sort of simple, demonstrable thing to point to as opposed to this Trump administration drug-pricing proposal that’s still not entirely clear how it would work and what exactly it would do.”

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