President Donald Trump on Friday leveled attacks on both pharmaceutical companies and foreign governments as he launched his first concrete attempt at making good on his big campaign pledge to rein in drug prices.
Trump in a Rose Garden speech outlined what he called “the most sweeping effort” in history to lower pharmaceutical list prices and limit patients’ out-of-pocket costs by promoting competition, easing government regulation and bringing cheaper medicines to market.
But many of the policies the government listed in its 44-page “American Patients First” document plan are either modest steps the administration has already taken, or policies that it has identified as needing further time and study. In fact, the document included 136 question marks. One of the ideas to be explored would require drugmakers to include prices in their advertisements.
HHS Secretary Alex Azar, speaking after the president, said it would “take months” to move on many of the proposals.
In general, pharmaceutical and biotech stocks rose after the announcement.
The president, who has vowed for more than a year and a half to crack down on drug prices, pledged to take a hard line with pharmaceutical companies responsible for driving up prices. He blamed prior administrations for failing to address what he called “this incredible abuse.”
“The drug makers, insurance companies, distributors, pharmacy benefit managers and many others contribute to the problem,” Trump said in a short speech. “Our plan takes steps to derail the gravy train for special interest.”
He also lit into the pharmacy benefit managers, the middlemen who sit between drug manufacturers and insurance companies, warning that “they won’t be so rich anymore.”
“We’re also eliminating the middlemen,” Trump said. “Our plan will end the dishonest double-dealing that allows the middleman to pocket rebates and discounts that should be passed onto consumers and patients.”
The White House’s plan will also propose changes to parts of Medicare Part D — the program that covers seniors’ medications — in a bid to encourage plans to negotiate lower drug prices, while also limiting regulatory barriers that the administration said prevents patients from paying less out of pocket. A separate proposal would require companies to pass on a larger proportion of their drug rebates to patients.
“We will have tougher negotiation, more competition and much lower prices at the pharmacy counter, and it will start to take effect very soon,” Trump said.
Some consumer groups worry that giving the plans more room to negotiate will mean lower prices — but fewer drugs covered. It could be hard for consumers to navigate choosing a drug plan — and they may face hurdles in getting specific medications, if they are covered at all.
Democrats slammed the White House blueprint as inadequate and soft on the drug industry. House Minority Leader Nancy Pelosi called the plan “weak” and “yet another giveaway to Big Pharma.”
“Instead of putting forth a bold initiative, the President pulled his punch,” she said in a statement.
The administration’s strategy — which mixes new policy ideas and proposals already laid out in the White House’s 2019 budget request — will take months to implement and won’t immediately bring down drug prices.
The plan stops short of seeking drastic changes to the health care industry that would revamp the costly path drugs take from development to Americans’ doorstep.
The blueprint does not call for giving Medicare the power to negotiate with drug makers, a longstanding Democratic proposal that Trump had embraced on the campaign trail — but that is opposed by most Republicans and Azar, the president’s top health official. Nor is there leeway to import drugs from foreign country, another idea that Trump endorsed early on in the campaign.
Rather, the White House is relying largely on dozens of regulatory initiatives aimed at nudging costs lower and encouraging health care companies across the spectrum to cut costs.
“The president’s blueprint is a sophisticated approach to reforming and improving this unbelievably complex system,” Azar said.
The plan does not hinge on Congress passing any major legislation, in what sources familiar with the plan’s development said was a recognition of lawmakers’ reluctance to tackle any more big bills ahead of November’s midterm elections.
Still, it does call on Congress to advance smaller measures previously laid out in the White House’s 2019 budget request, including offering certain Medicare patients free generic drugs and capping their out-of-pocket costs for prescription medicines.
Trump also pledged to pressure foreign countries to raise their drug costs, slamming nations that use government controls or negotiations to limit prices as extortionists.
“When foreign governments extort unreasonably low prices from U.S. drugmakers, Americans have to pay more to subsidize the enormous cost of research and development,” he said. ”It’s unfair and ridiculous and it’s not going to happen any longer.”
Public attention to pharmaceutical costs has risen in recent years, spurred by the steep price hikes some manufacturers have imposed for crucial drugs. In one of the highest profile cases, Turing Pharmaceuticals hiked the price of its lifesaving drug Daraprim by more than 5,000 percent in 2015 to $750. The company’s founder, Martin Shkreli, ultimately landed in jail on unrelated securities fraud.
Yet in a sign of Washington’s difficulties to date in lowering drug prices, Daraprim’s list price has remained unchanged.
Wall Street didn’t appear fazed by Trump’s promise to crack down on middlemen who got “rich” off drug pricing. While shares in pharmacy benefit managers like Express Scripts and CVS Health immediately dipped, the firms quickly regained their losses and were trading even higher by the end of the president’s speech.
“Lots of diagnosis but no treatment,” said Gerard Anderson, an expert on pharmaceutical policies at Johns Hopkins’ Bloomberg School of Public Health.
In his remarks, Azar allowed that making any significant progress will take time — but argued that the administration is intent on reforming the broader health care system.
“This is not a one-and-done deal,” he said. “It is a comprehensive process, and as the president said, it will take time to reorder an entire complex, multibillion-dollar system of our economy.”
Still, it remains unclear whether those initiatives can ultimately back up Trump’s vow to get drug prices “way down,” and how long it might take.
Trump has long promised to crack down on skyrocketing drug costs. But work on a comprehensive strategy did not begin in full until Azar’s confirmation as HHS secretary earlier this year.
“He’s going to get those prescription drug prices way down,” Trump said at the January swearing-in of Azar, who previously spent a decade as a pharmaceutical executive. “Prescription drug prices is going to be one of the big things.”
Dan Diamond and Jennifer Haberkorn contributed to this report.