Top administration officials pushed back on drugmakers' charge that the plan would import "socialized" price controls.
Some Capitol Hill Republicans seemed cool to the plan, and it was unclear if Trump's move would yield political dividends.
"If the goal is overall out of pocket cost reduction for consumers, these proposals are promising and offer some of the boldest challenges to the medical establishment", said Patel, who worked on health policy in the Obama administration. In the United Kingdom, for example, a drug company will go to the National Institute for Health and Care Excellence, or NICE, offering confidential discounts or rebates off of a drug's list price.
However, Howard Deutsch, principal at management consulting firm ZS, said that while it is well-established that people in other countries pay less than Americans, calling it "freeloading" was a misrepresentation.
Thursday, Trump proposed having Medicare base what it pays for some expensive drugs on the average prices in other industrialized countries, such as France and Germany, where prices are much lower.
"Same company. Same box".
"In other words, Americans pay more so that other countries can pay less, very simple". But the proposal only applies to drugs administered in doctors' offices and outpatient hospital settings- "medicines like cancer treatments and injectable treatments for rheumatoid arthritis or eye conditions", Politico explains.
- Don't expect immediate rollbacks.
Meanwhile, he said the U.S.is paying billions of dollars for its own home-grown drugs.
Also, Trump's Justice Department is seeking to invalidate the health reform law's provisions governing pre-existing conditions as part of lawsuit being brought by 20 Republican states.
Other portions of the proposal, which is the result of a drafting process HHS began earlier this year, would allow vendors to negotiate prices for certain medications covered under Medicare Part B. The proposal to require drug prices in TV ads could be delayed by litigation and notably, if implemented, does not include any penalties for companies who fail to post their prices. If you're upset about high drug prices, blame America's commitment to a relatively unrestrained free market, not, say, the policies of the United Kingdom. In his remarks Thursday, he combined that with a swipe at foreign trade practices, framing the Medicare proposal as a way to restore fairness for American healthcare consumers.
HHS Secretary Alex Azar criticized a system in which other countries to pay significantly less for drugs than the US government. In 2016, Medicare paid more $17 billion for the 27 drugs, an amount that would be reduced by more than $8 billion under the new model. "The only thing standing in the way is the one special interest that has benefited from this program far out of proportion to any other actor. the pharmaceutical industry".
The health insurance industry, at odds with drugmakers over prices, was pleased with the administration's action.
Trump kicked off his drug costs initiative last May from the White House Rose Garden, where he announced a 44-page blueprint containing some significant ideas that could threaten industries along the drug supply chain. The Trump administration's proposal calls for the creation of an experimental "international pricing index" that would use the lower prices paid by other advanced industrial countries as benchmarks for payments under the Part B program. Azar said politics would have nothing to do with it. The agency will launch a pilot program to reimburse doctors with a flat rate, rather than a percentage of the drug's price, to remove any incentive for doctors and hospitals to choose more expensive drugs over cheaper ones. CMS estimates that the Target Price would produce about a 30% savings over total spending for the selected Part B drugs. The IPI model instead would engage private sector vendors to offer certain drugs to participating physicians and hospitals at a rate based on a Target Price derived from an worldwide price index.
"Some of the proposals make sense to us but most of our companies have relatively limited exposure to Part B and a total projected savings of $17.2Bn over five years (if the plan is fully implemented) should not be overly concerning to investors, in our view", wrote Credit Suisse analyst Vamil Divan in an October 25 note, referring to drugmakers covered by the bank's research team. Beneficiaries would save an estimated $3.4 billion through lower cost-sharing.
Any push to dramatically lower prices here could meet resistance not only from drugmakers but from doctors, another powerful lobby.