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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)

Next Story

Advance Of Summit, NATO Pacify Trump

NATO also plans to consider a Franco-German proposal

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Flags of NATO member countries are seen at the Alliance headquarters in Brussels, Belgium. VOA

As Britain prepares for the NATO leaders’ meeting outside London December 3-4, the alliance said Thursday it had agreed to redistribute costs and cut the U.S. contribution to its central budget.

NATO’s central budget is relatively small at around $2.5 billion a year, mostly covering headquarters operations and staff, and different than its defense budget. U.S. President Donald Trump often complains of inequitable burden-sharing, with only nine of the 29 member countries meeting the 2%  of gross domestic product target for the alliance’s defense spending.

Regarding the central budget, “The U.S. will pay less, Germany will pay more, so now the U.S. and Germany will pay the same,” NATO Secretary-General Jens Stoltenberg said in Paris Thursday.

The United States currently pays about 22% of NATO’s central budget. Beginning 2021, both U.S. and Germany will contribute about 16%.

NATO also plans to consider a Franco-German proposal to create a working group of “respected figures” to discuss reform in the alliance and address concerns about its future.

The announcement to reduce the American contribution is seen as a move to placate Trump, who has considered withdrawing from the alliance but has since taken credit for its promised reforms.

“In 2016, only four allies spent 2%  of GDP on defense,” a senior administration official told reporters Friday, adding that there are now nine countries, including the U.S.,  meeting the 2% target, with 18 expected to do so by 2024.

“This is tremendous progress, and I think it is due to the president’s diplomatic work,” he said.

 U.S. forces from Syria, a move Trump made without consulting NATO
A convoy of U.S. vehicle is seen after withdrawing from northern Syria, on the outskirts of Dohuk, Iraq. VOA

Internal strife

Leaders of the 29 member states will attempt a show of unity during the summit but the alliance is facing questioning about its relevance and unity, particularly after the October withdrawal of U.S. forces from Syria, a move Trump made without consulting NATO.

“It’s exactly in the wake of that decision that you had [French] President [Emmanuel] Macron say what he said about the alliance being ‘brain-dead’ and referencing the lack of American leadership in the sense of leading in a community and not just going out on your own,” said Gary Schmitt, a NATO analyst with the American Enterprise Institute.

U.S. troops’ withdrawal from Syria prompted Turkey to launch an offensive against Kurdish YPG militia in northern Syria. The move spurred Macron to vent his frustration over what French diplomats say is NATO’s lack of coordination at a political level, and triggered fear among allies that the assault will undermine the battle against Islamic State militants.

Meanwhile, a simmering war between Russia and Ukraine has become the backdrop of Trump’s impeachment, with the American president allegedly having withheld hundreds of millions of dollars of military aid to pressure the Ukrainian government to announce an investigation of former Vice President Joe Biden, a Democratic presidential candidate running against Trump. Kyiv needs the aid to counter Moscow’s aggression.

The two conflicts in Europe’s eastern and southern flank further complicate Washington’s already-strained relations with other NATO members. Meanwhile, despite American efforts to reassure European leaders of Washington’s continuing commitment, anxiety about U.S. neglect of NATO under Trump persists, said Hans Kundnani, Senior Research Fellow in the Europe Program at Chatham House.

Ukrainian President Volodymyr Zelenskiy, welcomes NATO Secretary General Jens Stoltenberg
Ukrainian President Volodymyr Zelenskiy, left, welcomes NATO Secretary General Jens Stoltenberg during their meeting in Kyiv, Ukraine. VOA

Kundnani noted a series of American officials who have come to reassure Europeans not to take Trump’s tweets too seriously and focus on what is happening on the ground, particularly the military reinforcement of NATO’s eastern flank. Still, Kundnani said that in the last year Europeans have started to realize it’s “not really good enough” and they’re now facing the “reality of the of the crisis in NATO.”

“Some of them are hoping that Trump will be out of office in in a year’s time but the real fear is that Trump wins a second term,” said Kundnani, adding that some Europeans are hoping that “U.S. gradual withdrawal from Europe” might “snap back to the status quo ante if Trump is not re-elected.”

Diverging European responses

“The upcoming celebration of NATO’s 70th anniversary will be marked by important divisions within the alliance — not just across the Atlantic, but also within Europe,” said Karen Donfried, president of the German Marshall Fund of the United States.

In Paris, the view is “strategic autonomy,” said Donfried, with many in France concluding that Washington’s security guarantee can no longer be relied on. Warsaw is promoting “strategic embrace”  developing close bilateral relationship with Trump to guarantee its own security, while Berlin is advocating “strategic patience.”

Germany in the middle is a little bit divided between the “Atlanticists” and the “post-Atlanticists,”   Kundani said, adding that “Europeans are very much arguing” about these approaches.

Donfried said that against this backdrop, NATO allies are approaching the London summit with a sense of foreboding, knowing that they carry the responsibility to articulate alliance’s common purpose and ongoing relevance.

“If they don’t, [Russian President Vladimir] Putin will be raising a glass in Moscow to the fraught state of the alliance at 70,” she said.

Another summit goal for most European leaders, is to simply avoid a Trump flare-up, like those that have happened in past meetings.

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President Donald Trump meets with British Prime Minister Boris Johnson at the United Nations General Assembly, New York. VOA

Many have discovered this can be achieved through flattery. “They can talk about all the things that they’ve done and very smartly suggest that President Trump has generated the kind of pressure to make those things happen,” Schmitt said.

“They can actually praise President Trump, even though this is very hard for them to do because of the personality clashes.”

Many will be watching Trump’s encounters with Macron, including their bilateral meeting, as well as with British Prime Minister Boris Johnson. Johnson has pleaded for Trump to stay out of the upcoming British election during his London trip.

The senior administration official said that Trump is “aware of this” and “absolutely cognizant of not wading into other countries’ elections.”

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Other potential clashes are simmering too. Turkish President Tayyip Erdogan said Friday that Emmanuel Macron’s NATO “brain-death” warning reflects a “sick and shallow” understanding, telling the French president “you should check whether you are brain dead.”

The French foreign ministry has summoned Turkey’s ambassador to Paris to protest the statement. (VOA)