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Azar Pressed on Trump's Drug Pricing Plan

Analysis  |  By MedPage Today  
   June 15, 2018

'Where are the big, bold ideas?' asks ranking Senate Democrat.

This article first appeared June 13, 2018 on Medpage Today.

By Jennifer Reising

WASHINGTON -- Secretary of Health and Human Services Alex Azar, JD, defended President Trump's new blueprint to curb the rising costs of prescription drugs during a hearing of the Senate Health, Education, Labor, and Pensions committee on Tuesday, calling it an aggressive, long-term solution.

Senate Democrats pressed Azar on the details of Trump's "American Patients First" plan, while Republicans argued it laid out solutions to lower drug prices.

In his opening statement, Azar outlined the strategies in the President's blueprint and argued, "We have begun to take action on each of them already."

He cited creating incentives for lowering list prices set by drug companies, better negotiating for Medicare Part B and D, stopping drug companies who are unfairly blocking competition, and curbing out-of-pocket costs by ensuring that patients pay the lower-cost drug option.

In her opening statement, Sen. Patty Murray (D-Wash.), the committee's ranking member, said the president's blueprint has more questions than answers. "Where are the big, bold ideas?" she asked.

Murray pointed out that negotiating drug prices through Medicare was not in the plan. "As a candidate, President Trump constantly brought up that idea."

"So while the administration hyped its drug pricing plan as a big step forward ... it is very clearly not," Murray said. She also noted that when President Trump announced the plan, drug companies' stocks "actually went up."

Sen. Elizabeth Warren (D-Mass.) questioned President's Trump's prediction of voluntary price reductions by drug manufacturers.

"On May 30, the president said that in reaction to the release of the drug pricing blueprint, drug companies would be 'announcing voluntary, massive drops in prices within 2 weeks,'" she said. "That same day, Senator Smith [Tina Smith, D-Minn.] and I sent letters to the top 10 drug manufacturers to see how many had lowered prices in response to the blueprint," continued Warren. "While all of them responded, zero out of 10 said they lowered prices. In fact, one of the 10 said that prices will go up later this year."

Asked by Warren which drug companies were lowering their prices, Azar said there were several drug companies looking at substantial price decreases in competitive drug classes and that the challenge is working with pharmacy benefit managers and distributors to do this.

However, there appeared to be bipartisan support to eliminate rebates, where pharmacy benefit managers and drug companies negotiate fixed-price contracts. When list prices rise, then out-of-pocket costs do too, based on that price.

Warren balked at the blueprint proposal to negotiate lower drug prices by moving patients from Medicare Part B -- where co-pays are capped at 20% -- to getting their drugs as part of Part D, where co-pays are capped as high as 40%. Warren pressed Azar to "guarantee" that no Medicare beneficiary would see increases in out-of-pocket costs.

Azar replied that the purpose was "to create competition where savings can be safely obtained, and leverage existing private-sector options within Part B."

Sen. Tim Kaine (D-Va.) urged the Administration to stop "blaming allies for Americans paying these high prices," and calling it the "blame Canada" argument. Instead, he suggested using "best price" contracts for favored countries. When Azar appeared skeptical, Kaine suggested conducting a pilot project to test the concept. Sen. Doug Jones (D-Ala.) agreed: "Why not give it a real-world try?"

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