WASHINGTON (Reuters) - As U.S. President Donald Trump prepares to deliver a long-anticipated speech on Friday on curbing prescription drug costs, health industry insiders expect little in the way of policies that would hurt the drugmakers he once accused of “getting away with murder.”
The speech will address the high prices set by drugmakers, rising costs for consumers and barriers to negotiating lower prices for seniors in the government’s Medicare program, senior White House officials told reporters.
Health industry sources briefed on the plans expect the policy proposals to have a relatively modest impact on the healthcare system. They also expect Trump to sharply criticize foreign governments for paying less than the United States for prescription drugs.
The president has already abandoned ideas to lower drug prices that he supported during the 2016 election campaign, including allowing the government’s Medicare plan for older Americans to negotiate prices directly with drugmakers.
Critics say the Trump administration has been swayed by the powerful pharmaceutical lobby, which increased its reported spending in Washington by 30 percent last year. Trump’s Health and Human Services Secretary Alex Azar is a former Eli Lilly & Co executive.
Earlier this week, Swiss drugmaker Novartis admitted it paid $1.2 million to a consulting firm created by Trump lawyer Michael Cohen, who is under investigation over a payment made to a porn star who claims to have had a sexual encounter with Trump more than a decade ago. Trump denies having sex with the actress.
Novartis is not accused of any illegal activity, but the disclosure raised questions over how drugmakers try to gain influence.
“The payments to Cohen are just another indicator of how deep the corrosive influence of the pharmaceutical industry goes in the Trump administration,” said Peter Maybarduk of advocacy group Public Citizen. “It makes sense that proposals we see coming out of the administration would be somewhat limited.”
White House officials say Trump’s strategies would include requiring insurers and pharmacy benefit managers (PBMs) to share a portion of the rebates they get on prescription drugs with consumers to lower their out-of-pocket costs, as well as making it easier for cheaper generic and biosimilar copies of drugs to reach the market. Another proposal would make generic drugs free to low-income seniors.
Wall Street investors are bracing for the possibility that Trump will diverge from these plans. In the last week, Azar and other top health officials suggested that the president might take more aggressive action, some of which could directly impact drugmakers, as well as insurers, PBMs and hospitals.
Drugmakers argue that high prices for prescription medicines are necessary to fund development of much-needed innovative new treatments. But as scrutiny intensified, several pharmaceutical companies placed self-imposed limits on annual price increases. They have also tried to deflect blame for rising consumer costs on middlemen, such as PBMs like Express Scripts Holding, and to hospitals.
Trump has yet to take significant action on drug prices while in office, and a once-promised executive order on pricing never materialized.
Democrats have seized on the inaction as they prepare for congressional elections in October, with polls showing rising concern over healthcare costs among voters.
“Outrageous prescription drug prices are just another example of how President Trump is failing to deliver on his promises to the American people,” Senate Democratic Leader Chuck Schumer said on Thursday.
(Reporting By Yasmeen Abutaleb; Editing by Bill Berkrot)