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White House Proposal Fails the Litmus Test, Won’t Make Medicines More Affordable

Feb. 9, 2018

White House Proposal Fails the Litmus Test, Won’t Make Medicines More Affordable

Statement of Peter Maybarduk, Director of Public Citizen’s Access to Medicines Program

Note: Today, the White House Council of Economic Advisers released a report, Reforming Biopharmaceutical Pricing at Home and Abroad (PDF). Press reports indicate that some of the measures in the report may be included in the White House budget proposal expected to be released Monday.

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 serve 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 Council of Economic Advisers’ report that would yield some savings for the government (reducing physician incentives to administer expensive medications) and patients (out-of-pocket caps). Yet these savings and reforms are insignificant compared to the reforms that would be possible if the White House simply 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.

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.).

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.