Quest to Lower Drug Prices Pits Trump Against Formidable Opponents

Christopher Cheney, March 6, 2017

Aiming to significantly reduce medication prices presents the president with golden opportunities and a set of daunting challenges, healthcare industry experts say.

This is part of a series covering the Shaping of Healthcare's Future in the Trump era.

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President Donald Trump has said medication prices are too high and he plans to address the problem.

During his presidential campaign, Trump called for Medicare to negotiate drug pricing. In January, the president criticized the lobbying efforts of pharmaceutical companies and suggested again that the federal government should negotiate drug prices.

Although he faces high hurdles, the president appears to be on the right track, says Olusegun Ishmael, MD, MBA, an emergency room physician at Paris Community Hospital in Paris, IL, and former insurance company executive.

"The biggest insurer in this country is the U.S. government—between the Veterans Administration, Medicaid, and Medicare. The government should do the same thing that UnitedHealthcare and all the Blues do to negotiate pricing based on their volume," he says.

Insurers and foreign governments have been leveraging their purchasing power to negotiate drug prices for decades, Ishmael says.

"If someone walks into CVS or Walgreens without insurance and wants to get a prescription, they will pay almost twice as much as the UnitedHealthcare pricing. The reason is volume—it is a numbers game. As an insurer, when I have a certain amount of volume, I go to my pharmacy benefit management company and say, 'I am bringing you a million lives.'"

Christopher Cheney

Christopher Cheney is the senior finance editor at HealthLeaders Media.

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