Trump unveils plan to lower drug prices

President Trump on Friday outlined his long-awaited plan to lower drug prices, stopping short of a full-scale assault on the pharmaceutical industry while floating several ideas that could give companies heartburn.

Trump stepped back from the some of the sweeping proposals he offered on the campaign trail, like having Medicare negotiate drug prices, but still leveled pointed criticism at the industry.

“The drug lobby is making an absolute fortune at the expense of American consumers,” Trump said in remarks from the White House Rose Garden. “We are putting American patients first.”

The plan does not call for a major overhaul of drug companies’ pricing practices, but does include some proposals that they oppose.

Drug company stocks rose after the president’s speech, an indication that investors, at least, do not view the White House’s agenda as a major threat to the industry’s profits.

Much of Trump’s plan is still in the form of questions or suggested actions, and it will take time for actual detailed proposals to be put forward.

“A lot of good questions in the plan but very little actual action,” tweeted Walid Gellad, director of the Center for Pharmaceutical Policy & Prescribing at the University of Pittsburgh.

Seeking the upper hand ahead of the midterm elections, Democrats were quick to pounce, saying Trump was backing down from a fight with the industry.

“They’re breathing a sigh of relief in pharmaceutical board rooms across the country,” said Sen. Ron Wyden (Ore.), the top Democrat on the Senate Finance Committee.

“It’s still open season for drug companies to set astronomical prices that families can’t afford,” he added.

Among the biggest policy changes floated by the White House are requiring drug companies to disclose their prices in television ads and cracking down on delay tactics drug companies use to prevent cheaper generic drugs from reaching market.

Much of the plan does not go after drug companies directly, instead targeting other players like the “middlemen” that negotiate prices, known as pharmacy benefit managers (PBMs), who have been criticized for a lack of transparency.

“The middlemen became very, very rich,” Trump said. “They’re rich. They won’t be so rich anymore.”

Still, PBM stocks were also up on Friday afternoon.

“The things I see are largely focused on the distribution system,” said Dr. Peter Bach, a drug pricing expert at Memorial Sloan Kettering Cancer Center. “I don’t see a lot here tackling the list price of sole source branded drugs that have these really, really high prices.”

Still, Bach said possible changes to the system of paying rebates to PBMs would be “an enormous market shifting step” whose effects would be hard to predict.

Trump also called for adding more competition into Medicare Part B, which covers drugs administered in doctors’ offices, a program that is currently criticized as driving up costs. President Obama proposed reforms to Medicare Part B drug payments in 2016, but eventually scrapped the plan in the face of fierce resistance from doctors and drug companies.

Steve Ubl, CEO of the Pharmaceutical Research and Manufacturers of America, the main drug industry trade group, issued a statement critical of some elements of the plan while adding that the group needs time to review it.

He singled out the Medicare Part B changes, saying they “could raise costs for seniors and limit their access to lifesaving treatments.”

David Mitchell, founder of the advocacy group Patients for Affordable Drugs, was measured.

He said Trump’s actions are “not what is required to fully deliver on that promise” to lower drug prices but included some good steps, like speeding up cheaper generic drugs getting to market and capping out of pocket costs for Medicare beneficiaries.

“It has some good things, some bad things, and some missing things,” he said.