President Donald Trump announced his blueprint to lower prescription drug prices on May 11. The plan lays out strategies to fix high drug prices for American consumers.
“We will have a tougher negotiation, more competition, and much lower prices at the pharmacy counter, and it’ll start to take effect very soon,” Trump said.
One of the main objectives of the plan is to increase competition in the generic drug market. Generic drugs are copies of brand-name drugs and they are marketed after the brand-name drug’s patent expires.
According to the economic report of the President’s Council of Economic Advisers (CEA) published in late February, many artificially high prices result from government policies that prevent healthy price competition.
“Drug prices, for example, are sometimes artificially high due to government regulations that raise prices,” stated the CEA report. One of the objectives of the plan is to reduce the prices by encouraging more robust price competition.
The blueprint also includes some incentives for drug manufacturers to lower their list prices.
Health and Human Services (HHS) Secretary Alex Azar described the blueprint as “the most comprehensive action plan for drug affordability of any president” in history.
As part of the plan, Azar said they would look into having the FDA require disclosure of prices in advertisements.
“If we want to have a real market for drugs, why not have them disclose their prices in the ads too,” Azar said.
Many Americans, especially seniors, face high out-of-pocket costs for the drugs they need. According to the plan, HHS will give Medicare Part D plans better tools to negotiate discounts on behalf of seniors. And it will develop options to lower patients’ out-of-pocket spending.
“The drug lobby is making an absolute fortune at the expense of American consumers,” Trump said. “No industry spends more money on lobbying than the pharmaceutical health products industry.”
He accused lobbyists of protecting the status quo and keeping prices artificially high.
The list prices of drugs have skyrocketed in the last few decades. And government programs and private consumers do not always have the means to negotiate more reasonable prices.