The Trump Administration’s Attempt to Reign in Drug Prices

Top 3 Things You’ll Learn

  1. The status of the major legislative efforts to lower prescription drug prices in 2019
  2. Failed attempts by the Trump administration to reduce prescription drug costs in 2019
  3. How the administration is considering allowing the safe importation of foreign drugs

The Trump administration’s efforts to lower drug prices in 2019 have centered on three major proposals. These proposals followed the administration’s drug pricing blueprint that was released in May 2018, titled “American Patients First,” which indicated that the administration would identify potential solutions to combat high drug prices. As we settle into 2020, it’s important to know where we stand today regarding these legislative efforts. We are setting expectations for what’s to come this year by recapping the main obstacles, and opportunities we faced in 2019.

Rulings Aimed at Reducing Drug Prices Fail to Thrive

Two of those federal-level proposals — a sweeping plan to eliminate rebates from government drug plans and a ruling to require drug makers list prices in television advertisements — lost momentum and then quickly withered on the vine in 2019:

  • On July 8, a federal judge stopped a Trump administration initiative that would have required drug makers to reveal the sticker price of their drugs in television ads if the list price was more than $35 a month.
  • Then on July 11, the Trump administration withdrew its highly debated proposal to eliminate rebates from government drug plans.

All along, pharmacy benefit manager (PBM) executives stated that the rebate rule would cause premiums to rise and force PBMs to drastically change their business models without requiring the same concessions from the pharmaceutical companies who set the drug list prices.

Federal lawmakers and the current administration continue to struggle with finding a unified solution for Rx affordability. #drugcosts

New Action Plan Around Importing Certain Prescription Drugs

On July 31, the Department of Health and Human Services (HHS) and the Food and Drug Administration (FDA) released the Safe Importation Action Plan, which outlined steps both agencies will take to consider allowing the safe importation of certain drugs originally intended for foreign markets.

The Action Plan describes two pathways to provide safe, lower cost drugs to consumers:

  1. HHS would authorize pilot projects that define strategies to import Canadian versions of certain FDA-approved drugs. The pilot projects would be time-limited and include conditions that would ensure manufacturing safety and significant cost-savings for consumers. Certain drugs, including biologics, infused drugs, and intravenously injected drugs, would be ineligible for importation.
  2. The FDA would provide recommendations to manufacturers that voluntarily chose to import versions of FDA-approved drugs sold in foreign countries. In this situation, manufacturers choosing to offer lower-cost versions of drugs that are already on sale in the United States could repackage the drugs and sell them as different products. The manufacturer would need to establish with the FDA that the foreign version is the same as the U.S. version. This pathway does not exclude any class of drugs.

Any long-term plan would require congressional oversight for sustained support, and there are many operational and safety challenges to address in each of these pathways. Among the concerns is that the importations could trigger a drug shortage in Canada. FDA Acting Commissioner Ned Sharpless, MD, said that the FDA plans to formally announce these policies with opportunity for public comment.

Where That Leaves Us

Undoubtedly, there is a very real problem of prescription drug affordability for both plans and their members that must be addressed. While the pundits in Washington, payers, PBMs, and drug manufacturers battle on to protect their own financial interests, we remain committed to advocating for you to help keep the pharmacy benefit affordable in the near-term.


The National Law Review

U.S. Department of Health & Human Services

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