Trump's Unimpressive Blueprint for Lowering Pharmaceutical Prices

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(Bloomberg) -- In what he described Friday as “the most sweeping action in history to lower the price of prescription drugs for the American people,” President Donald Trump ignored every step that would make a real difference. Indeed, a list of the actions he left out of his “blueprint” could serve as a guide to good policy.

Trump neglected, to begin, his campaign promise to let Medicare use its vast purchasing power to negotiate prices. He said nothing in support of bipartisan legislation in Congress that would get generic drugs to market faster — the best way to lower prices for both government and private insurers. He didn’t mention letting Americans import medicines from other countries that carefully control drug quality. And he said not a word about the comparative effectiveness studies that the U.S. needs to judge what individual medicines are worth.

Instead, he offered mostly timid and familiar ideas. Cut red tape at the Food and Drug Administration to bring drugs to market faster. Give individual insurers in Medicare’s Part D drug program a little more room to negotiate prices for subsets of beneficiaries. Adjust the rules on how pharmacy benefit managers negotiate rebates.

These small changes are fine, as far as they go. So is Trump’s suggestion, borrowed from some states, to outlaw contractual gag rules that prevent pharmacists from telling customers how to save money on their medicines. So is the proposal from Alex Azar, secretary of Health and Human Services, to require TV drug ads to disclose prices. But taken together, all these steps aren’t enough to appreciably lower U.S. drug prices.

One novel proposal in the president’s grab bag is meant to actually raise prices — not in the U.S., but in other developed countries. Trump said he has told Trade Representative Robert Lighthizer to push U.S. trading partners to allow their drug prices to rise. Even if it were possible to persuade other countries to cancel the deals they’ve struck, potentially adding to the pharmaceutical companies’ profits, that wouldn’t in itself lower prices in the U.S.

Trump said his administration has been working on lowering drug prices “right from day one.” In fact, since getting elected, the president’s zeal to take on Big Pharma has clearly weakened. Small measures may make a small difference to small numbers of consumers. Much bolder steps will be needed to make drug prices affordable for all Americans.

—Editors: Mary Duenwald, Clive Crook

©2018 Bloomberg L.P.

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