Health and Human Services Secretary Alex M. Azar II on Monday said the idea of directly negotiating drug prices under Medicare did “come up” in talks with President Trump but they settled on free-market solutions to avoid ending up with the kind of drug rationing he said plagues European countries.
Pushing back at Democratic criticism and skeptical weekend headlines, he said Mr. Trump is fulfilling his promise to do “smart bidding” by letting Medicare negotiate deeper discounts for some pricey drugs, and merging drug purchases under two Medicare programs to take advantage of discounts.
He said it’s the most aggressive approach ever tried and a smart alternative to “socialized medicine systems.” But he also suggested the Trump plan was an offer that Big Pharma shouldn’t refuse, saying that after years of promises by politicians and companies, the president wants to see real action.
“This is a topic the president and I have discussed at great length, and the idea of direct negotiation in Medicare has come up. He is tired of the government getting bad deals on the drugs seniors need, and I couldn’t agree more,” Mr. Azar said.
The secretary said if the pharmaceutical industry wants direct negotiation “off the table entirely, the only way is to come to the table with us, to engage in meaningful negotiation with Medicare Part D plans, and to stop the price hikes.”
As soon as this week, the Food and Drug Administration will start publishing the names of drugmakers who “game” the patent system by preventing generic manufacturers from gaining the samples of brand-name drugs they need to conduct testing and win approval for their versions.
And Mr. Azar said he won’t be shy about using administrative authority to sign off on demonstration projects that move drugs from Medicare Part B, where the government pays full price, to Part D, the Medicare drug discount program the government began under President George W. Bush.
“I want to remind you all that this pen has a lot of power,” the secretary told reporters after a speech at HHS, holding up a pen for dramatic effect. “The secretary of HHS is invested with incredible authority to regulate, to modify programs, to do demonstrations, to experiment. And we intend to use the full scope of the power contained in this pen on any of these rather than sitting back and waiting for Congress on all items.”
Even as he spoke, the Democratic National Committee continued to pan Mr. Trump’s plan as feckless, pointing to pharmaceutical stocks that rallied Friday as an indication the industry was breathing a sigh of relief.
Mr. Azar said critics were ignoring the breadth of Mr. Trump’s plan and putting too much stock in European-style price-setting.
“The only way that direct negotiation saves money is by doing something this administration does not believe in: denying access to certain medicines for all Medicare beneficiaries, or setting prices for drugs by government fiat,” he said. “We don’t believe either of these proposals would put American patients first. They would move us toward the kind of socialized medicine systems that have such a notorious reputation for poor quality and access.”
He compared it to Obamacare’s false promise that if you liked your health plan, you could definitely keep it once the law took full effect.
Mr. Azar also pushed back at the idea of importing drugs from places like Canada, saying our “lovely neighbor” doesn’t have enough drugs to sell at a low prices, and there is no way to ensure imports are not counterfeits from, say, China.
“The United States has the safest regulatory system in the world. The last thing we need is open borders for unsafe drugs in search of savings that cannot be safely achieved,” he said. “You can’t improve competition and choice in our drug markets with gimmicks like these — you have to boost competition and price transparency.”
He said they want to see an end to gag clauses, in which pharmacists refuse to tell consumers they could pay less by paying cash instead of using insurance in some instances.
Mr. Trump also wants to repeal Obamacare’s cap on penalties drug companies must pay when they raise prices faster than inflation. That will require legislation from Congress.
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
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