The 6 most interesting parts of Trump’s mostly disappointing drug price plan

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President Trump meeting with pharmaceutical industry leaders in December 2017.
Trump’s big speech on drug prices actually focused on costs to consumers — a very different issue.

“We’re gonna see those prices go down. It’ll be a beautiful thing to watch,” President Donald Trump said in the Rose Garden on Friday. It’s a big promise. But the actual plan his administration put out doesn’t back it up. In fact, stocks for pharmaceutical companies soared after Trump’s remarks.

We’ll get to what the president actually offered in his much-anticipated speech on drug prices in a moment. But I wanted to start with some important context, which crystallized for me in recent conversations I have had about prescription drug costs.

What you need to understand before you understand Trump’s drug pricing plan
There are, at the very least, two distinct issues when it comes to prescription drugs:

Drug prices: the list prices that drug companies set for their medicines
Drug costs: what actual human beings pay out of their pockets for medications
[...]
This is what Trump’s plan does/doesn’t do
I think that is essential context to understand Trump’s drug pricing plan, such as it is. Because he is mostly talking about addressing drug costs, but not really drug prices. As Axios’s Sam Baker smartly put it Friday, this plan is mostly “focused on rearranging costs, rather than lowering them.”

With all that, here are the six most interesting proposals in Trump’s plan. It should be noted that the path forward for many of them is murky.

1. Potentially require drug makers to disclose list prices in advertisements

This is a good example of our limited ability to influence list prices. There is no real mechanism to reduce prices here.

”Let me put it this way: what’s the reason to think it would have a significant impact on pricing and spending? Shame? We’ve seen that it doesn’t work,” Rachel Sachs at Washington University in St. Louis told me.

It’s also not clear this could survive a First Amendment challenge.

2. Give private Medicare Part D plans more flexibility to negotiate discounts for certain generic and high-cost drugs without competitors

3. Allow certain Part D drugs to be priced differently based on different uses

4. Prohibit a current practice in Part D that stops pharmacists from telling patients when they would save money if they paid out of pocket instead of using their Part D plan

These are all of a kind: making incremental changes to Medicare Part D, the outpatient prescription-drug benefit, so that the health insurers that provide the benefit can negotiate bigger discounts and to make sure that patients themselves aren’t being forced to pay more than necessary.

Those are worthwhile causes. But as Sachs noted on Twitter, “saving money at the pharmacy” is not quite the same as “lower drug prices.”

5. Prevent gaming and remove barriers to getting generics and biosimilars to market

6. Undertake some vaguely defined changes to US trade policy to try to address the disparity between what the US pays for drugs and what other countries pay

These two fall under the “competition” rubric in my mind. But otherwise, they are quite different. Making sure generics (and their equivalent in the biologics space, biosimilars) can get to market as soon as possible does help lower costs for patients — once a brand-name drug’s monopoly has ended, that is.

As for Trump’s strenuous promises that he will “end the freeloading” of other countries, it’s not at all clear what he means or whether that would have any positive effect on US drug prices, as Craig Garthwaite pointed out on Twitter.

In summary, according to Sachs:

“The administration is proposing to take very few actions that would impact pharmaceutical companies’ bottom lines. Many of the actions they have proposed are repeats of those they’ve presented on other occasions, and even those actions still appear to be far in the future.”

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https://www.vox.com/policy-and-politics/2018/5/11/17346436/trump-speech-prescription-drug-costs-medicare