Trump releases details of plan to lower prescription drug costs

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WASHINGTON — Trying to close out major unfinished business, the Trump administration issued regulations Friday that could lower the prices Americans pay for many prescription drugs.

It is unknown whether the rules will withstand expected legal challenges from the pharmaceutical industry or whether President-elect Joe Biden’s administration will accept, amend or try to roll them back entirely.

The two finalized rules, long in the making, would:

— Tie what Medicare pays for medications administered in a doctor’s office to the lowest price paid among a group of other economically advanced countries. That’s called the “most favored nations” approach. It is opposed by critics aligned with the pharmaceutical industry who liken it to socialism. The administration estimates it could save $28 billion over seven years for Medicare recipients through lower copays. It would take effect Jan. 1.

— Require drugmakers, for brand-name pharmacy medications, to give Medicare enrollees rebates that now go to insurers and middlemen called pharmacy benefit managers. Insurers that deliver Medicare’s “Part D” prescription benefit say that would raise premiums. The Congressional Budget Office estimates it would increase taxpayer costs by $177 billion over 10 years. The Trump administration disputes that and says its rule could potentially result in 30% savings for patients. It would take effect Jan. 1, 2022.

The pharmaceutical industry said Trump’s approach would give foreign governments the “upper hand” in deciding the value of medicines in the U.S. and vowed to fight it.

Trump also announced he is ending a Food and Drug Administration program that was designed to end the sale of many old, and potentially dangerous, unapproved drugs that had been on the market for decades.

Sales of hundreds of these drugs, including some potentially harmful, have been discontinued under the program. But an unintended consequence as been sharply higher prices for consumers for these previously inexpensive medicines after they were approved by the FDA.

Health and Human Services Secretary Alex Azar, a former drug company executive, said the rules will “break this model where patients suffer, where prices increase every year,” while corporate insiders enrich themselves.

The international pricing rule would cover many cancer drugs and other medications delivered by infusion or injection in a doctor’s office.

It would apply to 50 medications that account for the highest spending under Medicare’s “Part B” benefit for outpatient care. Ironically, the legal authority for Trump’s action comes from the Affordable Care Act, the Obama-era health care overhaul he’s still trying to repeal and replace.

The rule also changes how hospitals and doctors are paid for administering the drugs,.

—AP stories contributed to this report.

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