Salubrity and Human Services Secretary Alex Azar had a stern warning for the pharmaceutical vigour on Friday, a day after the Trump administration proposed a plan to change the way Medicare pay backs for certain expensive drugs.
Speaking from the Brookings Institution in Washington, Azar divulged Big Pharma cannot stand by and defend the status quo on drug pricing.
“Modification is coming,” Azar told an audience at Brookings. “You can be a part of the solution in bringing market-based, competitive mean of compensating for drugs and lowering patient out-of-pocket costs, or you can put your conduct in the sand and pretend change is not coming and you’ll get whatever comes at you.”
On Thursday, President Donald Trump profiled the new drug-pricing proposal, which would permit Medicare to create a new payment brand that would bring drug prices in line with what other states pay. Azar released a report earlier that day that said the U.S. pay outs 1.8 times more for some prescriptions covered by Medicare Component B than other countries.
The proposal could save U.S. taxpayers billions of dollars. HHS approximations $17 billion in program savings over five years. The intermediation wants to issue a formal rule early next year, with the new payment exemplar taking effect in 2020, HHS said.
Ana Gupte, senior research analyst at Leerink Fellows, told CNBC that Azar seems determined to implement the Medicare coins and drive down drug costs.
“We also expect more reorganize changes including possible elimination of drug manufacturer rebates and assess transparency,” Gupte said.
The SPDR S&P Pharmaceuticals index, which lines drug stocks, was down more than 1 percent in intraday patron Friday.
The Pharmaceutical Research and Manufacturers of America (PhRMA), the industry’s vigour trade group, opposes Trump’s plan, saying in part that the charge “is imposing foreign price controls from countries with keep companied health care systems that deny their citizens access and inhibit innovation.”
“These proposals are to the detriment of American patients,” PhRMA president and CEO Stephen J. Ubl indicated in a statement. “The United States has a competitive marketplace that controls payments and provides patients with access to innovative medicines far earlier than in fatherlands with price controls.”
Gupte said the proposed changes puissance actually benefit insurers like UnitedHealth Group and Humana by lifting more competitive drug prices across the industry.
“This expression is in line with the Drug Pricing Blueprint announced in May which laid out fashion to lower prices, increase negotiation, and improve competition,” she said in a note earlier Friday.