President Donald Trump laid out proposals to combat high drug prices in a speech on Friday, but Trump, who has taken swipes at the pharmaceutical industry for “getting away with murder,” went much easier on drugmakers than expected.
In all, Trump spared pharma, instead focusing his criticism on “middle-men,” or pharmacy benefit managers, and drug lobbyists. Here are five takeaways from his speech and the HHS proposal.
Trump diverged from bold campaign proposals on pricing
In the 2016 election, candidate Trump promised to lower prices by allowing Medicare to negotiate prescription prices or by importing drugs from other countries. Proposals in Friday’s speech were much easier on pharma companies. Rather than importing foreign drugs, Trump wants other countries to pay more for drugs so Americans bear less of the cost. That proposal could boost pharma’s sales elsewhere in the world.
Pharma stocks jumped after the speech
Because Trump went easy on pharma, shares of drugmakers spiked after the speech. Companies such as Pfizer, Merck, Gilead, and Amgen saw a jump, and the Nasdaq Pharmaceuticals Index went up 2.6% on Friday.
Four areas of focus
The HHS plan broke proposals into four areas: increased competition, better negotiation, incentives for lower list prices, and lower out-of-pocket costs. Within those, some ideas include increasing generic and biosimilar competition and requiring Medicare Part D — Medicare’s prescription drug plan — to share rebates with patients.
One idea affecting marketers: Disclose prices in drug ads
The HHS document floated the idea of requiring drugmakers to put list prices in drug ads. However, that plan is still up in the air, like most of the other proposals, the Food and Drug Administration would need to evaluate the change in pharma advertising.
Middle-men took the hit
Trump said in the speech, “Whoever those middlemen were — and a lot of people never even figured it out — they’re rich…We’re very much eliminating the middlemen.” Although he didn’t identify the “middle-men,” PBMs susch as CVS and OptumRx don’t seem to be worried. The Pharmaceutical Care Management Association endorsed the administration’s plan on Friday.