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Trump moves to reduce Medicare prescription drug prices

President Donald Trump speaks on drug pricing at

President Donald Trump speaks on drug pricing at the Department of Health and Human Services in Washington, D.C., on Thursday. Credit: AFP/Getty Images/NICHOLAS KAMM

President Donald Trump on Thursday said his administration will reduce prescription drug prices by allowing Medicare to pay for certain drugs based on pricing used in other developed nations, putting an end to “global freeloading.”

But pharmaceutical industry representatives say the measure would have a negative impact on patients’ access to the medications.

The initiative would give Medicare the authority to buy prescription medications from pharmaceutical companies based on an international price index. It is projected to reduce Medicare’s payments for these drugs by 30 percent over the next five years. Under the plan, doctors would receive the same reimbursement for similar drugs, eliminating an incentive to administer higher-cost drugs, administration officials said.

Trump blamed other countries for having lower prescription drug prices, saying they “rigged” the system, forcing Americans to pay more while foreign nations pay less. He charged the other countries with violating patent laws and “disrespecting” the U.S. by taking pharmaceutical research done by U.S. companies.

“We are taking aim at the global freeloading that forces American consumers to subsidize lower prices in foreign countries through higher prices in our country,” Trump said in a speech at the Department of Health and Human Services.

Citing a medication that helps prevent blindness, the president said under the current system the U.S. pays more than $1 billion for the drug while other countries buy it for $187 million per year.

“This happens because the [U.S.] government pays whatever price the companies set without any negotiation whatsoever,” Trump said. “Not anymore.”

Stephen J. Ubl, president and CEO of PhRMA, which represents drug companies, said the group opposes the plan because it would limit access to medication and curtail innovation “to the detriment of American patients.”

He noted the countries Trump refers to for the new price controls all have some form of socialized health systems. U.S. patients have access to cancer medications two years earlier on average than those in countries such as the United Kingdom, Germany and France, he said.

“The United States has a competitive marketplace that controls costs and provides patients with access to innovative medicines far earlier than in countries with price controls, and it’s why we lead the world in drug discovery and development,” Ubl said.

Trump’s announcement was the latest in a series aimed at bringing healthcare policy proposals into focus as the topic has become a flashpoint in Congressional midterm elections.

Earlier this month, Trump signed two bills aimed at lowering drug costs including one that lifts a “gag order” prohibiting pharmacists from telling consumers about lower cost alternatives to their prescription medications.

“We are changing the entire system of how we pay for prescription drugs in this country,” said HHS Secretary Alex Azar.

Azar, in his introduction of Trump, credited him with “bold ideas” for reducing the costs of healthcare and “not being afraid to take on special interest” such as the pharmaceutical industry.  

“This president will continue to fight every day to put American patients first and bring down drug prices,” he said.

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