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Trump Presents Proposal To Lower The Price Of Specific Drugs

The Trump administration proposal is open for public comment for 60 days.

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- President Donald Trump says his plan will stop unfair practices that force Americans to pay much more than people in other countries for some medications — but the plan would not apply to medicines people buy at pharmacies. VOA

Less than two weeks before the midterm elections, President Donald Trump on Thursday announced a plan to lower prices for some prescription drugs, saying it would stop unfair practices that force Americans to pay much more than people in other countries for the same medications.

“We are taking aim at the global freeloading that forces American consumers to subsidize lower prices in foreign countries through higher prices in our country,” Trump said in a speech at the Department of Health and Human Services.

“Same company. Same box. Same pill. Made in the exact same location, and you would go to some countries and it would be 20 percent of the cost of what we pay,” said Trump, who predicted the plan would save Americans billions. “We’re fixing it.”

But consumers take note:

— The plan would not apply to medicines people buy at the pharmacy, just ones administered in a doctor’s office, as are many cancer medications and drugs for immune system problems. Physician-administered drugs can be very expensive, but pharmacy drugs account for the vast majority of what consumers buy.

— Don’t expect immediate rollbacks. Officials said the complex proposal could take more than a year to be put into effect.

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Protesters gather across the Chicago River from Trump Tower to rally against the repeal of the Affordable Care Act, March 24, 2017, in Chicago. VOA

In another twist, the plan is structured as an experiment through a Medicare innovation center empowered to seek savings by the Affordable Care Act. That’s the law also known as “Obamacare,” which Trump is committed to repealing.

Trump has long promised sweeping action to attack drug prices, both as president and when he was running for the White House. He made his latest announcement just ahead of the Nov. 6 elections, with health care high among voters’ concerns.

Under the plan, Medicare payment for drugs administered in doctors’ offices would gradually shift to a level based on international prices. Prices in other countries are lower because governments directly negotiate with manufacturers.

Drugmakers immediately pushed back, arguing the plan amounts to government price-setting.

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Stephen Ubl, president of the Pharmaceutical Research and Manufacturers of America, speaks during a news conference in Trenton, N.J., Sept. 18, 2017. VOA

“The administration is imposing foreign price controls from countries with socialized health care systems that deny their citizens access and discourage innovation,” Stephen Ubl, president of the Pharmaceutical Research and Manufacturers of America, said in a statement. “These proposals are to the detriment of American patients.”

Trump is linking the prices Americans complain about to one of his long-standing grievances: foreign countries the president says are taking advantage of U.S. research breakthroughs.

Drug pricing expert Peter Bach of Memorial Sloan Kettering’s Center for Health Policy and Outcomes called the plan “a pretty substantive proposal” but one that faces “serious political challenges.”

“The rhetoric about finally dealing with foreign freeloading suggests that we are going to take steps to get other countries to pay their fair share for innovation,” Bach added. But that’s “quite literally the opposite of what is being proposed. What is being proposed is that we freeload off of other countries’ ability to negotiate more effectively.”

Democratic leaders on Capitol Hill were dismissive. House Minority Leader Nancy Pelosi of California said if Trump wants to save seniors money, he should seek congressional approval for Medicare to negotiate prices for its main prescription drug program, Part D. Senate Democratic leader Chuck Schumer of New York said, “It’s hard to take the Trump administration and Republicans seriously about reducing health care costs for seniors two weeks before the election.”

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Health and Human Services Secretary Alex Azar speaks during an interview with The Associated Press in New York, Sept. 12, 2018. VOA

The health insurance industry, at odds with drugmakers over prices, commended the administration’s action.

As an experiment, the proposal would apply to half the country. Officials said they’re seeking input on how to select the areas that will take part in the new pricing system. Health and Human Services Secretary Alex Azar said politics would have nothing to do with it.

In advance of Trump’s speech, HHS released a report that found U.S. prices for the top drugs administered in doctors’ offices are nearly twice as high as those in foreign countries. The list includes many cancer drugs. Medicare pays directly for them under its Part B coverage for outpatient care.

Physician-administered drugs cost Medicare $27 billion in 2016. HHS says the plan would save Medicare $17.2 billion over five years. Beneficiaries would save an estimated $3.4 billion through lower cost-sharing.

The plan could meet resistance not only from drugmakers but also from doctors, now paid a percentage of the cost of the medications they administer. However, HHS officials said the plan was designed so it would not cut into doctors’ reimbursements.

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President Donald Trump speaks at a rally endorsing the Republican ticket in Erie, Pennsylvania, VOA

Azar said more plans were being developed on drug costs.

“This is not the end of the road, the end of the journey,” he said. “There is more coming.”

Trump has harshly criticized the pharmaceutical industry, once asserting that the companies were “getting away with murder.” But it’s largely been business as usual for drugmakers even as Trump has predicted “massive” voluntary price cuts.

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A recent Associated Press analysis of prices for brand-name drugs found far more increases than cuts in the first seven months of this year. The analysis found 96 price hikes for every price cut. The number of increases slowed somewhat, and they were not quite as steep as in past years, the AP found.

The Trump administration proposal is open for public comment for 60 days. (VOA)

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Trump’s Deep Misunderstanding of Trade Policy is Threatening the American Economy

President Donald Trump's aggressive and unpredictable use of tariffs is spooking American business groups

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FILE - Steel rods produced at the Gerdau Ameristeel mill in St. Paul, Minn., await shipment, May 9, 2019. The recent flareup with the U.S. over Mexico tariffs may prove to be a pivotal juncture. VOA

President Donald Trump’s aggressive and unpredictable use of tariffs is spooking American business groups, which have long formed a potent force in his Republican Party. Trade

Corporate America was blindsided last week when Trump threatened to impose crippling taxes on Mexican imports in a push to stop the flow of Central American migrants into the United States.

The two sides reached a truce Friday after Mexico agreed to do more to stop the migrants. But by Monday, Trump was again threatening the tariffs if Mexico didn’t abide by an unspecified commitment, to “be revealed in the not too distant future.”

Such whipsawing is now a hallmark of Trump’s trade policy. The president repeatedly threatens tariffs, sometimes imposes them, sometimes suspends them, sometimes threatens them again. Or drops them.

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FILE – Traffic moves on the old Gerald Desmond Bridge next to its replacement bridge under construction in Long Beach, Calif., July 2, 2018. President Donald Trump’s tariffs provoke retaliatory tariffs on U.S. exports. VOA

Business groups, already uncomfortable with Trump’s attempts to stem immigration, are struggling to figure out where to stand in the fast-shifting political climate. They have happily supported Trump’s corporate tax cuts and moves to loosen environmental and other regulations. But the capriciousness of Trump’s use of tariffs has proved alarming.

“Business is losing,” said Rick Tyler, a Republican strategist and frequent Trump critic. “He calls himself ‘Mr. Tariff man.’ He’s proud of it. … It’s bad news for the party. It’s bad news for the free market.”

Also Read- U.S. Pentagon Emits More Greenhouse Gases Than Portugal, Study Finds

“It was a good wakeup call for business,” James Jones, chairman of Monarch Global Strategies and a former U.S. ambassador to Mexico, said of Trump’s abrupt move to threaten to tax Mexican goods.

Creating distance from Trump

Just last week, the sprawling network led by the billionaire industrialist Charles Koch announced the creation of several political action committees focused on policy — including one devoted to free trade — to back Republicans or Democrats who break with Trump’s trade policies. A powerful force in Republican politics, the network is already a year into a “multi-year multi-million dollar” campaign to promote the dangers of tariff and protectionist trade policies.

The Chamber of Commerce, too, is in the early phases of disentangling itself from the Republican Party after decades of loyalty. The Chamber, which spent at least $29 million largely to help Republicans in the 2016 election, announced earlier this year that it would devote more time and attention to Democrats on Capitol Hill while raising the possibility of supporting Democrats in 2020.

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FILE – A field of soybeans is seen in front of a barn carrying a large Trump sign in rural Ashland, Neb., July 24, 2018. President Donald Trump’s enthusiasm for tariffs has upended decades of Republican trade policy that favored free trade. VOA

Few expect the Chamber or business-backed groups like the Koch network to suddenly embrace Democrats in a significant way. But even a subtle shift to withhold support from vulnerable Republican candidates could make a difference in 2020.

Trump’s boundless enthusiasm for tariffs has upended decades of Republican trade policy that favored free trade. It has left the party’s traditional allies in the business world struggling to maintain political relevance in the Trump era.

Also Read- Canon Doing Research and Feasibility Studies to Explore the Possibility of Manufacturing its Products in India

Uncertainty for businesses

Trump’s tariffs are taxes paid by American importers and are typically passed along to their customers. They can provoke retaliatory tariffs on U.S. exports. And they can paralyze businesses, uncertain about where they should buy supplies or situate factories.

“Knowing the rules helps us plan for the future,” said Jeff Schwager, president of Sartori, a cheese company that has had to contend with retaliatory tariffs in Mexico in an earlier dispute.

Trump seems unfazed.

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FILE – Sen. Chuck Grassley, R-Iowa speaks at a town hall meeting in Greenfield, Iowa, June 2, 2017. VOA

Myron Brilliant, head of international affairs at the U.S. Chamber of Commerce, went on CNBC on Monday to decry “the weaponization of tariffs” as a threat to the U.S. economy and to relations with trading partners.

Trump responded by phoning in to the network to declare “I guess he’s not so brilliant” and defend his trade policies.

“Tariffs,” he said, “are a beautiful thing.”

Trump can afford to be confident about his grip over the party: Roughly nine in 10 rank-and-file Republicans support his performance as president, according to the latest Gallup polling. So Republicans in Congress have been reluctant to tangle with him.

Also Read- Apple to Bring Bigger Battery in its Upcoming 2019 iPhone Offerings

But last week’s flareup over the Mexico tariffs may prove to be a pivotal juncture. The spat was especially alarming to businesses because it came seemingly out of nowhere. Less than two weeks earlier, Trump had lifted tariffs on Mexican and Canadian steel and aluminum — action that seemed to signal warmer commercial ties between the United States and its neighbors.

“This really came out of left field,” said Daniel Ujczo, a trade lawyer at Dickinson Wright. “It was something we thought we had settled, and we hadn’t.”

Weighing legislation

Congress was already showing signs of wariness, especially over Trump’s decision to dust off a little-used provision of trade law to slap tariffs on trading partners. Section 232 of the Trade Expansion of 1962 lets the president impose sanctions on imports that he deems a threat to national security.

Trump has deployed that provision to tax imported steel and aluminum. And he’s threatening to impose Section 232 tariffs on auto imports, a chilling threat to American allies Japan and the European Union.

Congress is considering bipartisan legislation to weaken the president’s authority to declare national-security tariffs. In doing so, lawmakers would be reasserting Congress’ authority over trade policy, established by the Constitution but ceded over the years to the White House.

The legislation has stalled in Congress this spring. But on Tuesday, Iowa Republican Chuck Grassley, chairman of the Senate Finance Committee, said the bill would be ready “pretty soon.” Given “how the president feels about tariffs,” Grassley said, “he may not look favorably on this. So I want a very strong vote in my committee and then, in turn, a very strong vote on the floor of the Senate.”

Congressional reluctance to challenge Trump could be tested in coming months. Lawmakers may balk if he proceeds with plans to tax $300 billion worth of Chinese goods that he hasn’t already targeted with tariffs — a move that would jack up what consumers pay for everything from bicycles to burglar.

Likewise, taxing auto imports — an idea that has virtually no support outside the White House — would likely meet furious resistance. So would any move to abandon a trade pact with Mexico and Canada. Trump has threatened to withdraw from the 25-year-old North American Free Trade Agreement if Congress won’t ratify a revamped version he negotiated last year.

For all their disenchantment with Trump, the Chamber of Commerce may yet find it hard to break its ties to the party. Though the chamber says it’s weighing a more bipartisan approach, it recently featured a sign on its front steps: It likened Trump to Republican icons Ronald Reagan and Dwight Eisenhower. (VOA)

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