In a bold move, President Trump unveiled the blueprint of the plan to lower prescription drug prices. He proposes to bring down the costs at home by negotiating with other foreign countries to pay higher prices. Trump had specified earlier that the USA is ending ‘global freeloading’. He believes, American drug companies are left with fewer resources to finance their research and develop new cures due to foreign price controls.
These are the six proposals mentioned in the President Trump’s plan:
1. Foreign companies should pay more for prescription drugs:
Americans shell out more on drugs as compared to their counterparts in other countries. Trump proposes to pressurize other countries to raise their prices but, it's unclear if they would be willing to do it.
2. Disclosing drug prices:
Pharmaceutical companies will have to disclose drug’s list prices in advertisements to encourage transparency.
3. The patient system won’t encourage unfair monopolies:
Pharmaceutical companies use patents for new drugs to recover the money spent on researching and developing drugs. But, they hold it for too long, resulting in a decrease in competition and rising prices. Trump said that patent system will reward innovation but, it will not be used to protect unfair monopolies.
4. Lower drug price for Medicare:
Experimenting with “value-based purchasing” i.e. money back guarantee if drugs don’t work as planned. The new system plans to make generic medicines free for some low-income Medicare beneficiaries.
It will also try to work out if Medicare drug plans can be allowed to pay different prices for the same drugs.
5. Changing the rebate system:
At present, the pharmaceutical companies offer discounts to insurers and employers. This rebate is regarded as a trade secret and the Pharmacy Benefit Managers (PBM) pocket them partly. Trump is planning to revisit anti-kickback statutes to classify these rebates as illegal kickbacks.
6. “Gag clauses” under fire:
Gag clause mentioned in the contracts between pharmacies and PBMs, doesn’t allow pharmacists to disclose to consumers that they would pay lesser out of the pocket for prescription drugs as compared to paying through insurance. There are suggestions to ban these clauses.