The president said he would promote more competition among pharmaceutical companies, but didn’t call for Medicare to directly negotiate lower prices or consumers to be able to import low-cost drugs.
WASHINGTON — President Donald Trump vowed Friday to “bring soaring drug prices back down to earth” by promoting competition among pharmaceutical companies, and he suggested the government could require drugmakers to disclose prices in their ubiquitous TV advertising.
But he dropped the popular proposals of his campaign, opting not to have the federal government directly negotiate lower drug prices for Medicare. And he chose not to allow U.S. consumers to import low-cost medicines from abroad.
He would instead give private entities more tools to negotiate better deals on behalf of consumers, insurers and employers.
Speaking in the White House Rose Garden, Trump said the current system has been corrupted by greedy businesses and middlemen who have made “an absolute fortune” through “dishonest double-dealing” at the expense of U.S. consumers who need medicine to extend or improve their lives.
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His proposals did not scare the system he criticized.
Ronny Gal, a securities analyst at Sanford C. Bernstein & Co., said the president’s speech was “very, very positive to pharma.”
Indeed, shares of several major drug and biotech companies rose immediately after the speech, as did the stocks of pharmacy-benefit managers, the “middlemen” Trump said had gotten “very, very rich.” The Nasdaq Biotechnology Index rose 2.7 percent on Friday. Companies that make expensive specialty drugs saw their stocks rise, including Vertex Pharmaceuticals and Biogen. Pharmacy-benefit managers Express Scripts closed up by 2.59 percent, while CVS Health finished up 3.2 percent.
Many of Trump’s ideas can be put into effect through regulations or guidance documents. Some will require legislation. But most of the measures could take months or years to implement, and none would stop drugmakers from setting sky-high initial prices.
“There are some things in this set of proposals that can move us in the direction of lower prices for some people,” said David Mitchell, founder of Patients for Affordable Drugs. “At the same time, it is not clear at all how they are going to lower list prices.”
Drugmakers generally can charge as much as the market will bear because the U.S. government doesn’t regulate medicine prices, unlike most other developed countries. Prescription-drug spending in the U.S. grew 1.3 percent in 2016, to $328.6 billion, according to the Centers for Medicare and Medicaid Services.
Republicans welcomed the president’s attention to drug prices and promised to review his proposals, which Trump said would “derail the gravy train for special interests.”
Democrats were not impressed. “President Trump offered little more than window dressing to combat the rising cost of drugs — a problem that is pinching the pocketbook of far too many Americans,” Sen. Chuck Schumer of New York, the Democratic leader, said after the speech.
Trump said his administration would provide new powers for Medicare’s private prescription-drug plans, known as Part D, to negotiate lower prices but he would not use the purchasing power of the federal government to conduct direct negotiations. He said he would make it easier for pharmacists to inform patients of cheaper alternatives and would speed the approval of over-the-counter drugs “so that patients can get more medicines without prescription.”
Trump also denounced foreign countries that he said “extort unreasonably low prices from U.S. drugmakers” so that their citizens often pay much less than U.S. consumers for the same drugs.
Alex M. Azar II, the secretary of health and human services, said the Food and Drug Administration would explore requiring drug companies to disclose list prices in their TV advertisements. The government, he said, also will consider whether to “outlaw rebates,” the discounts and price concessions that are a key link in the drug-supply chain.
Other nations, also struggling with high drug prices, scorned Trump’s advice on this issue. “Drug manufacturers in the United States set their own prices, and that is not the norm elsewhere in the world,” a spokesman for the 28-member European Union said on Friday. “EU member states have government entities that either negotiate drug prices or decide not to cover drugs whose prices they deem excessive. No similar negotiating happens in the U.S.”