Medicaid Drug Rebate Program Summit

October 1-3, 2018
Renaissance Chicago Downtown
Chicago, IL

October 1-3, 2018
Renaissance Chicago Downtown
Chicago, IL

THE AUTHORITATIVE MDRP EVENT FOR EVERYTHING GOVERNMENT PRICING, REBATES, AND REGULATION

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Whitepaper

Whitepaper Summary:
The Potential Impacts of the Trump Administration's May 11th Blueprint on US Drug Pricing

In January, President Trump made his State of the Union address, where he took a firm stance to reduce the prices of pharmaceutical drugs. In his speech, he stated that “One of my greatest priorities is to reduce the price of prescription drugs. In many other countries, these drugs cost far less than what we pay in the United States. That is why I have directed my Administration to make fixing the injustice of high drug prices one of our top priorities. Prices will come down.”

Following up on this promise, on May 11th, the Trump administration released its Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs titled “American Patients First”. During his announcement, President Trump emphasized that while America has been investing a lot of
resources to develop pharmaceuticals products, American patients have been unable to profit from these innovations, as many cannot afford them. The United States Health and Human Services Secretary (HHS) Alex Azar added that “We (the US) have access to the greatest medicines in the world, but access is meaningless without affordability.”[ii]

In an effort to make drugs more affordable, the administration has identified four major issues that it wishes to address: 1) high list prices for drugs; 2) seniors and government programs overpaying for drugs due to lack of the latest negotiation tools; 3) high and rising out-of-pocket costs for consumers; and 4) foreign government free-riding off of American investment in innovation. Under the assumption that prices are spiraling out of control, the Trump administration has elected to address these challenges by suggesting some immediate actions, as well as seeking feedback on a number of potential long-term initiatives.

It is important to recognize that the blueprint is not proposed legislation, or even draft guidance, but rather a number of proposals, ideas and invitations for feedback. Also, while the document does suggest some reforms, it does not indicate which way these reforms would be implemented and is seen by some analysts as more of an invitation to discuss specific issues rather than a roadmap to implementation. As such, while its expected direct impact is limited, it remains an important proposal to understand the priorities of the current administration.

In the next few pages, we will review the most important of these proposed actions and discuss how they will impact pharmaceutical companies selling into the US market.


References:

i - President Donald J. Trump’s State of the Union Address, January 30, 2018, https://www.whitehouse.gov/briefings-statements/president-donald-jtrumps-state-union-address/
ii - Trump Administration Releases Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs, May 11th, 2019, https://www.hhs.gov/about/news/2018/05/11/trump-administrationreleases-blueprint-lower-drug-prices-and-reduce-out-pocket-costs.htmliii - Arnold & Porter, Trump Administration Issues Blueprint to Lower Drug Prices and Reduce Out-Of-Pocket Costs, May 14, 2018 https://www.arnoldporter.com/en/perspectives/publications/2018/05/trump-administration-issues-blueprint-to-lower
iv - HHS May Test Changes to How Medicare Pays for Expensive Drugs, Bloomberg Law, May 15, 2018, https://www.bloomberglaw.com/document/X4I514OC000000?emc=bhlnw_hlt%3A2
v - David Maris, Senior Health Care Equity Analyst, Wells FargoSecurities, Drug Pricing Report: June 2018
[i] - President Donald J. Trump’s State of the Union Address, January 30, 2018, https://www.whitehouse.gov/briefings-statements/president-donald-jtrumps-state-union-address/
[ii] - Trump Administration Releases Blueprint to Lower Drug Pricesand Reduce Out-of-Pocket Costs, May 11th, 2019, https://www.hhs.gov/about/news/2018/05/11/trump-administrationreleases-blueprint-lower-drug-prices-and-reduce-out-pocket-costs.html
[iii] - Arnold & Porter, Trump Administration Issues Blueprint to Lower Drug Prices and Reduce Out-Of-Pocket Costs, May 14, 2018 https://www.arnoldporter.com/en/perspectives/publications/2018/05/trump-administration-issues-blueprint-to-lower
[iv] - HHS May Test Changes to How Medicare Pays for Expensive Drugs, Bloomberg Law, May 15, 2018, https://www.bloomberglaw.com/document/X4I514OC000000?emc=bhlnw_hlt%3A2
[v] - David Maris, Senior Health Care Equity Analyst, Wells Fargo Securities, Drug Pricing Report: June 2018

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