- The Washington Times
Wednesday, December 25, 2019

President Trump claims that he made a dent in one of America’s thorniest problems — runaway prescription drug prices — and he is eyeing bigger wins on that front heading into 2020.

The White House outlined a way for states to import cheaper drugs from Canada and is coaxing Congress to act on a bipartisan bill that would cap drug prices paid by senior citizens.

Mr. Trump also hasn’t given up on a plan that would align the price of some drugs under Medicare with what other countries pay, according to a senior administration official familiar with his plans.

The Consumer Price Index for Prescription Drugs is 8.5% below where it would have been if it had continued along the pre-inauguration trend line, a data point the administration uses to argue it’s made progress in reversing the steady rise in drug prices.

The White House credits Mr. Trump’s efforts to clear a backlog of generic drug applications and his willingness to use the bully pulpit to make drugmakers think twice before demanding price increases.

Still, Mr. Trump is looking for more, as Democrats make their own pitch for aggressive action on drug prices ahead of the campaign.

“We’ve been effective. But we want to get a legislative deal,” Joe Grogan, assistant to the president and director of the president’s Domestic Policy Council, told The Washington Times.

Specifically, Mr. Trump has endorsed a bipartisan Senate bill by Finance Committee Chairman Charles E. Grassley, Iowa Republican, and Sen. Ron Wyden, Oregon Democrat, that would cap what seniors pay out-of-pocket. The bill also would force drugmakers to reimburse Medicare if their prices rise much faster than inflation.

Senate Republican leaders haven’t signaled whether the bill will get a floor vote, and the idea of an inflation cap is splitting their caucus.

Some Republicans fear drugmakers will set initial prices higher, though the White House and Mr. Grassley say support is building for the compromise because it will slash seniors’ costs and save taxpayers an estimated $100 billion.

“Pretty much every Republican has run as a fiscal conservative,” said Grassley spokesman Michael Zona.

House Democrats went their own way, passing a partisan bill that would require the federal government to negotiate down maximum prices for insulin and dozens of single-source, brand-name drugs that are among the priciest covered by Medicare. The negotiated price cannot exceed 120% of the average price in Australia, Canada, France, Germany, Japan and the United Kingdom.

Mr. Grassley and the White House said the bill’s massive penalties on drugmakers who refuse the negotiations will kneecap the industry and limit options for American consumers.

“Congress must fix this broken system, but not at the cost of critical innovation that could save and improve countless American lives,” Mr. Grassley said.

A year-end spending bill set a May deadline for renewing a series of critical health programs, giving leaders in both parties hope that Congress can negotiate a deal on drug pricing and surprise medical bills.

Soaring drug prices are a major issue for voters who will have the opportunity to reshape the federal government in 2020. The topic consistently ranks among top concerns, and roughly four in five Americans in a Kaiser Family Foundation poll taken earlier this year said the cost of prescription drugs is “unreasonable.”

Mr. Trump released a blueprint in early 2018 to tackle the problem, but it’s run into headwinds. The administration withdrew a bid to let certain Medicare plans limit coverage of drugs in “protected classes” and canceled a high-profile plan to require Medicare to pass drug-rebate savings on to seniors.

A rule that would force pharmaceutical companies to disclose the list prices of their drugs in television ads was blocked in the courts, leaving Mr. Trump to point to incremental wins elsewhere, such as Congress’s decision to ban “gag clauses” that shrouded lower prices at the pharmacy counter.

He also publicly berated companies who’d planned price increases.

“It may have had this public shaming effect, though the regulation agenda the administration has been trying to implement has hit several roadblocks,” said Juliette Cubanski, associate director of the program on Medicare policy at the Kaiser Family Foundation.

The administration said it backtracked on the protected-class proposal because it might have had unintended consequences for patients, including those with HIV. And in the case of the rebate rule, officials feared increased premiums under Medicare Part D, the federal prescription drug coverage for senior citizens, which also would mean a larger cost burden on taxpayers.

A senior administration official argued that this type of deliberation is reasonable, rather than a sign of weakness.

The administration did move forward on a proposed rule that would let states import certain prescription drugs from Canada in an attempt to lower drug costs in the U.S. Federal health officials also announced the release of a draft guidance that explains how manufacturers could import drugs and biological products originally intended for sale in other countries.

Although it is unclear whether drug importation will affect health care costs before the 2020 election, the administration has gone beyond its predecessors in trying to establish a regulated system for drug importation.

The U.S. government has no estimates on the amount of money consumers might save from the drug importation plan since it is unknown how many states will want to participate. However, the administration says states ranging from Florida to Colorado to Vermont have expressed interest.

Canada is frosty about freeing up its drugs for U.S. consumers, but the White House is not immune to tough trade negotiations with its foreign partners, a senior administration official said.

Also, the administration is still working on Mr. Trump’s bid for an International Pricing Index, which would align prices for doctor-administered drugs under Medicare Part B, the federal medical insurance for seniors, to what other developed nations pay.

Democrats say that sounds an awful lot like their bill to negotiate drugs under Medicare Part D to other countries’ levels. The administration, though, says its plan is a limited approach that lowers Part B prices from a level that is inflexible and unfair.

Mr. Grassley says support is growing for his own fix, which tries to balance the interests of drugmakers, consumers and taxpayers.

“Ultimately, whatever gets passed into law is likely to look a lot like this bill,” Mr. Zona said.

Congress and the White House are considering a conference to meld House and Senate bills down the road.

All told, it’s unclear which plans will survive.

“We’re seeing a lot of ideas being talked about now,” Ms. Cubanski said. “Whatever the outcome of this debate — in House, Senate and administration proposals — no one can say that people aren’t trying.”

• Shen Wu Tan contributed to this report.

• Tom Howell Jr. can be reached at thowell@washingtontimes.com.

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