Trump is promising to slash drug prices by 1,500%. Here’s what’s really happening
President Donald Trump recently promised to reduce drug prices.
“You know, we reduced drug prices to 1,200, 1,300 and 1,400, 1,500%, 1,500%,” he said on Sunday. “I don’t mean 50%. I mean 14-,500%.”
In recent months, Trump introduced a series of moves aimed at reducing drug prices, but has not yet moved the needle to reducing costs – experts reduce them by 1.500%, which is mathematically impossible.
How much Trump can achieve is a matter of discussion.
In his statement to CNN, “The Administration has the power to influence the prices of drugs in the US market,” the right -handed American Business Institute in the economic policy studies, Senior IPPOLO, CNN’ye told CNN. “Congress has tons of power, but the administration has a lot to do if they move on their own.”
Nevertheless, Milena Sullivan, the Policy Application Director of Pharmaceutical Companies, pointed to the “strong political will”, Milena Sullivan, the policy application director of pharmaceutical companies.
“President Trump already has a history with a desire to make a destructive policy and to force the boundaries, C CNN said. “Rhetoric, but intensifies. Even if mathematics is not logical, the political message is serious.”
Trump’s main effort on August 3 focuses on offering the same price as the price of the “most preferred nation” price in Europe and other peer countries in the United States. USA paid Almost three times For drugs as comparable countries in 2022.
The president tried to push this policy in the pharmaceutical industry, which was close to the end of the first period. Termination of a rule For a model program that Medicare will pay the price of the “most preferred nation” price for 50 drugs managed in doctor offices. However, the initiative was rapidly blocked in court on the grounds of procedures and was later canceled by Biden administration.
Now, Trump forces drug producers to voluntarily present us with the lowest price or reflections paid for a drug in a peer country.
The President said, “We will either voluntarily comply with this principle or use the power of the federal government to allow us to pay the same price as other countries to accelerate these price restrictions and discounts.” He said. executive order In the pricing of “the most preferred nation” pricing.
Some potential consequences include the health and human services department to implement policy, to allow more drug imports to the US, to review drug exports, and to change or cancel the approvals given for drugs that can be marketed in an insecure, ineffective or inappropriate way.
However, the subsequent discussions between HHS and drug producers did not give Trump’s results and asked him to balance the pressure to the public. HE Letters wrote At the end of last month, 17 major pharmaceutical companies CEO Real social And read loudly on a white palace briefing.
In the letters, Trump wants manufacturers to expand the pricing of the “most preferred nation” pricing to all drugs provided to Medicaid registered people. It also demands that companies guarantee the payment of these prices for all new drugs of Medicaid, Medicare and commercial market insurers.
“In the future, the only thing I will accept from drug producers is a commitment to American families that provide immediate relief from very inflated drug prices, and an end to the free driving of American innovation by Europe and other developed countries.”
Kush Desai, a White House spokesman, who was asked to comment on Trump’s claim to reduce drug prices 1.500%, said to CNN, “Americans have not folded for the same drugs as the payment of other developed countries and no other administration does not correct this unfair burden for American people.”
Tariffs can increase prices
Trump also continues other attempts in the pharmaceutical industry arena, including tariffs. Raise the drug prices and worsened Generic drug over time. Trump excluded the industry from the tariffs imposed in the first period.
The president has already accepted a framework Coping with the European UnionApart from some exceptions for some generic drugs, it will give a tariff of 15% to drug imports. And management is a investigation National safety consequences of pharmaceutical imports, which are expected to lead to tariffs in the sector.
Trump said that the taxes applied gradually over time will be announced in a short time. (The EU and the US said that sectoral tariffs would not be valid for drug imports from Europe, but the trade agreement has not yet been completed.)
Tariffs are designed to promote more domestic drugs, and Trump’s threats led a series of pharmaceutical companies to announce billions of dollars investment US operations. However, this is still not likely to take a break on drug costs to Americans, because the prices they pay are largely managed by the country’s complex health system, including the country’s producers, insurers, and pharmacy benefit managers.
Trump also supported PBM ReformThe Congress also watched but never passed. And by supporting drug producers to sell certain medicines directly to consumers at the “most preferred nation” prices, it cuts other players that can increase the costs in the supply chain.
The administration also tries to reduce medicare repayments to certain hospitals, so that payments are more compatible with the costs of purchase costs for the B Section B drugs applied by doctors. This will reduce the costs of patients from the patients because they depend on Medicare’s repayment rates. An effort to do this in the first management destroyed On the grounds of procedure by the Supreme Court.
Sullivan said that more meaningful policies need time to implement and probably contain other players in the drug supply chain.
“Political signals are that any applicable solution should be uninhabited in this complex health system, how the drugs are priced and delivered,” he said. “So it’s not the only manufacturers who feel the pressure right now.”
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