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FEDERAL | Trump Unveils Drug Pricing Plan

President Trump delivered a highly anticipated address on his administration's plan to lower drug prices, increase competition, and reduce out-of-pocket costs for medication. The plan, American Patients First, is a mix of policies already laid out in the White House budget proposal for fiscal year (FY) 2019 alongside some new ideas. The blueprint includes both immediate actions and long-term strategies and is designed to address four major aspects related to the cost of prescription drugs: high list prices, a lack of negotiating tools in government programs, rising out-of-pocket costs for consumers, and foreign governments benefiting from American innovation. Secretary of the U.S. Department of Health and Human Services (HHS) Alex Azar stated that he believes the vast majority of the plan can be accomplished through administrative action rather than legislative change.

The plan proposes a number of changes to reshape the Medicare program, including free generic drugs to seniors, requiring Part D plans to pass on a portion of rebates to the consumer, and capping certain out-of-pocket costs for Part D beneficiaries. The blueprint would reform how drugs in Medicare Part B are paid for and potentially shift more treatments into Part D, where there is more competition. The Administration is considering fiduciary status for pharmacy benefit managers (PBMs) as well as reforms to the 340B drug discount program.

The plan proposes to crack down on manufacturer gaming of regulatory processes and eliminate the use of gag clauses by insurers. The Food and Drug Administration (FDA) will also look into requiring the disclosure of prices in direct to consumer (DTC) advertising. Additionally, the President stated his intent to push other developed countries to loosen their price restrictions and pay more for pharmaceutical treatments.

The blueprint was well received by congressional Republicans. Chairman of the Senate Health, Education, Labor, and Pensions (HELP) Committee Lamar Alexander (R-Tenn.) issued a statement calling on the Senate to "consider the President's plan carefully and promptly." Republican leadership of the Energy and Commerce Committee issued a similar statement.

Democrats from the Affordable Prescription Drug Task Force have called on President Trump to endorse their own proposal to combat rising prescription drug prices. "A Better Deal" was released the day before the President's anticipated speech on the subject. The lawmakers outline the trend of rising prescription drug prices under the Trump administration, while reminding the President of his campaign rhetoric denouncing the pharmaceutical industry and urging him to support their Better Deal strategy.

The democratic lawmakers support allowing Medicare to negotiate drug prices; requiring drug companies to be transparent about their costs of production; eliminating patent system abuse tactics that reduce competition; allowing the importation of prescriptions; and improving trade agreements to make drugs more affordable. The lawmakers also propose the creation of a "price gouging enforcer" that would fine drug companies if price increases surpass a certain threshold.

The task force is led by Reps. Lloyd Doggett, Peter Welch, and Elijah Cummings (D-Md.). U.S. House Democratic Leader Nancy Pelosi (D-Calif.), U.S. Senate Democratic Leader Charles E. Schumer (D-N.Y.), Sen. Ron Wyden (D-Ore.), Sen. Bernie Sanders (I-Vt.), Rep. Jan Schakowsky (D-Ill.), and Sen. Amy Klobuchar (D-Minn.) were also in attendance at the unveiling of A Better Deal.