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Former Congressman Dr. Phil Gingrey provides public policy and government relations counsel to clients on a variety of issues. Here at Phil on the Hill, Phil draws upon his long career in public service to provide perspective and context on policy topics such as health care, the federal budget, annual appropriations, regulatory reform, and life sciences.



Trump’s Plan on Drug Pricing

Wednesday, July 11, 2018

Addressing the price of prescription drugs is a bit like a game my grandchildren play called Jenga. The challenge is to remove and stack oblong blocks of wood on a single tower. It may look easy at first, but pretty soon you’re struggling to find a way to remove pieces without sending the whole thing crashing down. Add in the onlookers constantly shouting out suggestions over your shoulder and you have a pretty good representation of what it feels like to be a health care policymaker.

President Trump is now taking his first stab at actually removing some blocks. Together with HHS Secretary Alex Azar, the president took to the Rose Garden recently to unveil his new plan to, in his own words, “bring soaring drug prices back down to earth.”

Overall, I see the plan as a mixed bag. It does address some areas in need of fixing, but it also falls far short of the president’s lofty campaign promises. To close observers of health care and drug pricing, it’s no surprise that this first effort is so limited. Balancing so many different interests is incredibly difficult, and it’s probably right to be cautious when entering this complex arena.

Featured in the plan and a subsequent Request-for-Information are proposals to change the 340B drug discount program and build on the destructive cuts implemented by the administration in January of this year. The 340B drug program was established to provide some relief for the neediest patients, but has caused divisions between hospitals and pharmaceutical companies. As I have written previously, I oppose these cuts and have significant concerns about the impact on the nation’s safety net. The president’s plan also addresses incentives in the system that may contribute to higher prices, questioning pharmacy benefit manager and plan contracts. This is an issue of interest to specialty pharmacists and others who have struggled in the current system to provide essential services to patients with complex, serious, disabling, and life-threatening medical conditions.

Despite these concrete provisions, many observers were quick to point out that the plan bore little resemblance to candidate Trump’s campaign promises. While he did make some good suggestions during the campaign that are worth exploring, now that he holds office, no seasoned health care observer should be surprised that the president didn’t propose everything in one go. Secretary Azar has made it clear that drug pricing is still a work in progress, and that this plan will take a lot of work to move forward with short- and longer-term efforts. It wasn’t intended to be a catch-all solution.

Still, there is useful information to be gleaned about Trump’s vision for the future of drug pricing. Although he is now taking a much softer tone toward pharmaceutical companies than he did during the campaign, there are still some groundbreaking proposals for transparency and accountability in his plan. Trump clearly hopes to introduce some level of increased transparency during his term.

In an election year, movement on many of these proposals is a challenge within Congress. We can expect the agencies will continue to issue their own regulatory proposals for consideration in the months leading up to the election. As more information becomes available, we must examine the effects of the proposed changes and whether and how they truly improve upon our current system for patients and families.