WASHINGTON – President Trump suggested Thursday that Medicare pays for some prescription drugs based on prices in other advanced industrialized countries – a major change that can save money for the government and millions of Medicare recipients.
As part of a demonstration project that covers half of the country, Medicare would establish an “international price index” and use it as a benchmark to determine how much to pay for drugs covered by Part B of Medicare.
“This is a Revolutionary Change” Mr. Trump said in a speech on Thursday at the Department of Health and Human Services. “Nobody has the courage to do it or they just do not want to do it.”
The Trump Administration responded Thursday, but the drug proposal will enter into force by 2019 or early 2020.
The Trump Administration officials said they were empowered to use the Center for Medicare and Medicaid Innovation created by the Affordable Care Act to implement the proposal . It has considerable discretion for carrying out demonstration projects. The Trump Administration accepts public comments before the project begins. But the proposal is likely to face strong political opposition from drug manufacturers, some caregivers and some Republicans in Congress, and it may also be subject to legal challenges.
“The Administration places foreign price controls from countries with socialized health care systems that deny their citizens access and counteract innovation,” said Stephen J. Ubl, President and Chief Executive Officer of Pharmaceutical Research, and Manufacturers of America, the Main Trade Group for Industry. “threatening patient access to innovative life-saving drugs.”
Democrats had their own reasons for skepticism.
“It is difficult to take the Trump administration and Republicans seriously to reduce the cost of health care for seniors two weeks before the election when they has repeatedly advocated and implemented policies that eliminate the protection of people with existing conditions and lead to increased healthcare costs for millions of Americans, “said senator Chuck Schumer of New York, the Democratic leader.
Mr. Trump’s announcement came a few hours after his a dministration released a government survey saying that Medicare paid 80 percent more than other advanced industrialized countries for some of the most expensive drug treatments.
“The current international drug award The system has put America in the final round,” said Alex M. Azar II, Secretary of Health and Human, when presenting the report.
Mr. Trump quoted the government’s international drug price report in its speech on Thursday and said he strives for “global free riding” that forces Americans to subsidize drug prices in other countries.
“Americans pay more so that other countries can pay less,” said Mr Trump.
The report compares prices charged by drug manufacturers in the United States and 16 other countries for 27 drugs covered by Part B of Medicare.
“Over all,” the report says, “Prices and repayment rates for Part B drugs are significantly higher for U.S. suppliers than buyers outside of the United States.”  “Medicare could achieve significant savings,” allow, “if prices in the US were similar to other major markets-based economies. “
In a Twitter post said Mr. Azar ” Medicare was found to pay the highest price for 19 of 27 drug investigations. “In one case, Medicare was paying less than international average,” he said.
Medicare beneficiaries are generally responsible for 20 percent of the cost of drugs covered by Part B of the program. So, if Medicare reduces the payment, the cost of recipients will be be “proportionally reduced,” says the administration.
Most recipients now have supplementary insurance, such as a Medigap policy or pensioners health benefits, to help pay their share of the bill for drugs covered by Part B of Medicare.
The new payment method proposed by the Trump Administration would be phased in from 2020 to 2025. “Overall, US taxpayers and patients spend a total of $ 17.2 billion over five years,” Azar said.
Among the drugs included In the study, Aranesp, for patients with anemia caused by chemotherapy or chronic renal disease, were several cancers such as Avast in, Herceptin and Keytruda; Lucentis, for eye conditions that can cause vision loss; and Rituxan, for rheumatoid arthritis and certain types of cancer. The list price for Keytruda and many other new cancer drugs is significantly more than $ 100,000 per year.
As an example, Mr. Trump: “A common cancer drug is almost seven times as expensive for Medicare as it is for other countries. This is a very useful and highly effective drug.” The president apparently referred to Treanda, a cancer treatment sold by Teva Pharmaceutical Industries.
The report was remarkable for several reasons.
It uses foreign drug prices as a reference or benchmark to judge prices in the United States. In many foreign countries, officials negotiate prices with drug manufacturers. While Democrats have long been in favor of such negotiations, Republicans in this country have blocked them, fearing that Medicare could ultimately dictate prices or restrict access to drugs that are considered too expensive.
Mr. Trump campaigned to president on promise to allow the government to negotiate drug prices, but since backed away from that position when he disclosed his first drug price proposals last spring. The new proposal goes back to that plan, not by the federal government negotiating drug prices directly, but by pricing for price negotiations in other countries.
Foreign countries “use their national health systems to negotiate lower prices in exchange for market access,” said the Trump administration in its report.
Democrats still pushed a more direct route. “On the threshold of mid-term elections, the president proposes a slight increase in drug-free relief when an emergency is urgent,” says representative Peter Welch, Democrat for Vermont. “Instead of nibbling around the edges, he should demand in his Union state that Congress sends to his desk within 30 days a wide price negotiation proposal that applies to all drugs in the Medicare program. “
Medicare has historically paid 106 percent of the” average selling price “for drugs that patients receive by infusion or injection into medical offices. Medicare drug costs have grown fast – on average about 9.5 percent per year since 2009, according to the Medicare Payment Advisory Commission, an independent agency advising the Congress.
The Trump Administration said that the current payment formula could provide financial incentives for some doctors and hospitals to use “the highest priced clinic advantageous product “.  The new report acknowledged many “limitations” in the data used for its international pricing. The preparation of drugs, their dosage and their strength may differ from country to country, says it.
The prices are quoted in the study “It can not accurately reflect the actual amount paid in the US or abroad” as they generally do not show the effects of discounts offered by drug manufacturers, the report said.
Obama officials were also concerned about the rapid growth of drug-borne drugs covered by Part B of Medicare. In March 2016, they proposed a nationwide experiment to reduce payments for many of these drugs. But they scrapped the plan nine months later after being criticized by drug companies, doctors, patients and congressmen from both parties who said it could endanger the availability of important drugs.
Mr. Azar said the Trump management proposal was “more radical” than Obama’s.
About two thirds of Part B drug spending is for biotechnology medicine called biological.
Countries included in the Trump Administration price comparisons of pharmaceuticals, except for the United States, were Austria, Belgium, Canada, Czech Republic, Finland, France, Germany, Greece, Ireland, Italy, Japan, Portugal, Slovakia, Spain, Sweden and the United Kingdom .