Feb. 12, 2018
Budget Confirms: Trump Administration Fails the Litmus Test, Won’t Make Medicines More Affordable
Statement of Peter Maybarduk, Director, Public Citizen’s Access to Medicines Program
Note: Today, the White House released its 2019 budget, which includes proposals the administration says will address high medication prices and access to treatment for patients.
The Trump administration is failing the litmus test on medicine affordability. Will most Americans see health care costs fall significantly as a result of these plans? The answer is no. The administration is foregoing the most effective and obvious prescription cost reforms in order to avoid a confrontation with Big Pharma. The problem with the Trump proposal is that it refuses to take measures to curtail Pharma’s pricing abuses and refuses to take on the monopolies that undergird the industry’s marketing power.
There are some positive ideas in the White House budget that could yield some savings for the government (for example, a modest proposal to increase competition among generics, reforms to Medicare Part B reimbursement calculations and measures to help prevent manufacturers from paying inappropriately low rebates under the Medicaid Drug Rebate Program) and patients (out-of-pocket spending caps and eliminating cost-sharing on generics for low-income Medicare beneficiaries). Yet these savings are very small compared to what would be possible if the White House stood up to prescription corporations. Instead of the half measures announced so far, the Trump administration should:
Leverage government negotiating power. That means keeping candidate Trump’s promise to untie the government’s hands, so that the government can negotiate directly with prescription manufacturers for lower prices on behalf of America’s seniors who rely on Medicare. Ninety-two percent of Americans support this proposal, which could save the government $16 billion a year. A proposal in the White House budget could give state Medicaid programs more negotiating power. This could be a positive step, but it comes with risks and we need more details.
Stop annual spikes. Every year, prescription companies raise their prices on old medicines at rates several times medical inflation. The administration should support the Stop Price Gouging Act (S. 1369), introduced by U.S. Sens. Sherrod Brown (D-Ohio) and Kirsten Gillibrand (D-N.Y.). A proposal in the budget to establish an inflation limit for Medicare Part B reimbursement is a good start, but broader reform to limit abusive spikes in our health care system at large is needed.
Curb monopoly abuse. Under existing law, the administration has the power to authorize generic competition with expensive patented medications. This would transform pharmaceutical markets and make therapies more affordable by an order of magnitude, including among treatments for the opioid addiction crisis. In addition, the administration should support the CREATES Act (S. 3056), which would stop brand-name interference with product samples and help bring generics to market more quickly. The Obama administration proposed reducing the monopoly term for biotech medical products from 12 to seven years. That proposal is missing in the Trump budget. A proposal that is present in the White House budget would stop generics firms from gaming a government-granted six-month market exclusivity period. This appears to be a positive reform, but we would expect the savings to be modest.