Trump Proposes Widespread Changes to Reduce Drug Prices

In a move that drew cautious responses from oncology groups and patient advocates, President Donald Trump announced a sweeping “blueprint” to lower prescription drug costs, promising to expand access to generic drugs and biosimilars and remove incentives that keep drug prices high.

The move includes an FDA evaluation of whether drug manufacturers should be required to list prices in their advertising, as well as longer-term efforts to change the imbalance between what US consumers pay for drugs developed in the United States versus what foreigners pay in their own countries, where drug prices are often substantially lower.

Other proposed changes included activating programs that enable CMS to stimulate drug price negotiation among Medicare Part D plan sponsors and improve the value of drug purchasing programs. “We will have tougher negotiation, more competition, and much lower prices at the pharmacy counter,” Trump said in a Rose Garden speech.

Presenting the program with Trump was Health and Human Services Secretary Alex Azar II, who said the 44-page plan, titled American Patients First, includes 50 different actions and proposals based on 4 key strategies:

• Increase competition
• Encourage drug price negotiation
• Create incentives to lower list prices
• Lower out-of-pocket costs

Azar said efforts would also be made to boost the availability of and awareness about biosimilars, which are similar-to-but-cheaper than brand-name products. “We need a vital and vibrant generic industry and generic drug market,” he said. “We need to foster and nurture a new, competitive biosimilar drug market.” Just a handful of biosimilars—defined as biological products that are similar or interchangeable with an FDA-licensed biological product—have been approved for cancer treatment by the FDA.

In September 2017, ABP-215 (bevacizumab-awwb; Mvasi), a biosimilar for bevacizumab (Avastin) developed by Amgen and Allergan, became the first biosimilar approved by the FDA for cancer treatment. The FDA approved the trastuzumab (Herceptin) biosimilar MYL-1401O (Ogivri; trastuzumab-dkst) in December 2017.

ABP-215 is approved for the treatment of colorectal, lung, brain, kidney, and cervical cancers in adult patients. MYL-1401O, developed by Mylan Pharmaceuticals, is indicated for the treatment of metastatic breast cancer and metastatic gastric cancer.

One prong in the administration’s attack on high drug prices is to stop anticompetitive practices by drugmakers. Azar, a former Eli Lily executive, said drugmakers could be punished for standing in the way of generics and biosimilars. “We also have to get after pharma companies that engage in anticompetitive practices and try to block the entry of generics or biosimilar products to market,” he said.

Trump said his plan is aimed at removing “gag” rules placed on pharmacists that prevent them from telling patients when a drug or its competitor would cost less if the patient pays out of pocket rather than going through insurance.

He vowed to end “abuse” that leads to higher drug prices and attacked pharmaceutical companies, payers, and pharmacy benefit managers, saying “the middle man” has gotten rich on the backs of patients.

The FDA issued a statement following Trump’s speech promising to improve the overall generic drug review process and reduce the cycles of review required for generic drugs. The agency said it has already taken steps to streamline the submission process for generic drug applicants and prioritize the review of certain generics.

The blueprint does not include a proposal allowing Medicare to directly negotiate drug prices, a promise Trump campaigned on in 2016. Instead, the administration wants to move high-cost drugs into the Medicare Part D program and give plan sponsors “significantly” more power to negotiate with manufacturers.

The administration is considering rules instituting site neutrality that would eliminate or reduce facility fees charged for drugs issued at hospitals and hospital-owned clinics. Site neutrality rules could also eliminate differences in inpatient and outpatient Medicare payment policies for drugs.

An ASCO spokesperson said the organization is reviewing the administration’s plan and declined to make a statement. A spokesperson with the American Cancer Society said in an email that the group was also reviewing the plan and could not comment on specifics.

Earlier in the day, Chris Hansen, president of the American Cancer Society Action Network (ACS CAN), released a statement saying that prescription drug prices are only 1 cost factor in a complex healthcare system. “Keeping health care affordable for cancer patients and other Americans requires a comprehensive examination of all cost drivers,” he said. “ACS CAN will continue its advocacy efforts to ensure patients have access to quality, affordable health care coverage for all their needs, including prescription drugs.”

The Community Oncology Alliance (COA) issued a statement saying that it “strongly supports” efforts to reduce drug prices. However, the organization criticized the administration because the plan leaves in place a 2% sequester cut made to Medicare reimbursement for cancer drugs in 2013.

“Today, President Trump has proposed several important initiatives to lower drug prices that align perfectly with COA’s ongoing work to advance meaningful, patient-centered solutions aimed at making cancer care less costly and more effective,” said executive director Ted Okon. “However, it is really disturbing that the blueprint released today does not address the Medicare sequester cut to drug payments that is fueling higher costs and cancer drug prices. All the sequester cut to Medicare drug payments for cancer drugs has produced is less access to cancer treatment, higher costs for patients and Medicare, and increased drug prices. It has to be stopped now.”

The agency said it is adopting policies “to reduce gaming of statutory and regulatory requirements to help ensure that drug companies don’t use anticompetitive strategies to delay development and approval of important generic drugs.”