Sunday June 16, 2019

Trump’s Chief Heath Officials Urges Congress to Pass Prescription Drug Discount Plan

Consumers are worried about prices for brand-name drugs, particularly new medications that promise breakthrough results.

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USA, Health
In this Oct. 26, 2018, file photo Health and Human Services Secretary Alex Azar speaks about proposed reforms to Medicare Part B drug pricing policies at the Brookings Institute in Washington. VOA

The Trump administration’s top health official asked Congress on Friday to pass its new prescription drug discount plan and provide it to all patients, not just those covered by government programs like Medicare.

The plan would take now-hidden rebates among industry players like drug companies and insurers and channel them directly to consumers when they go to pay for their medications.

Patients with high drug copays stand to benefit from the proposal, while people who take no prescription drugs, or who rely on generics mainly, would probably pay somewhat more, since premiums are expected to rise.

A day after unveiling the plan as a proposed regulation, Health and Human Services Secretary Alex Azar raised the stakes by calling on Congress to make it law and broaden it to include people covered by employer health insurance, not just Medicare and Medicaid beneficiaries.

“Congress has an opportunity to follow through on their calls for transparency … by passing our proposal into law immediately and extending it into the commercial drug market,” Azar said in a speech at the Bipartisan Policy Center think tank.

Trump , Health
U.S. President Donald Trump leads a discussion on immigration proposals with conservative leaders in the Cabinet Room of the White House in Washington, Jan. 23, 2019. VOA

Trump under pressure

Ahead of next week’s State of the Union speech, President Donald Trump is under political pressure to show results for his promise to slash prescription drug costs. Data show that prices for brand-name drugs have continued to rise, though at a somewhat slower pace. Polls show consumers across the political spectrum want government action.

Democrats say the administration’s plan doesn’t go far enough because it still leaves drug companies free to set high list prices. They say drug pricing is like a black box, and it’s impossible to tell if prices reflect actual costs or if companies are charging what they think the market will bear.

House Speaker Nancy Pelosi, D-Calif., says she’s also worried that the plan would raise premiums. HHS acknowledges Medicare prescription premiums would go up $3 to $5 a month.

Proposal draws interest

Nonetheless, the administration’s proposal appears to be in the mix as Congress gears up to craft legislation addressing prescription drug costs. Friday evening, the Republican chairman of the Senate Health, Education, Labor and Pensions Committee, expressed his support. Rebates “ought to lower costs to patients, and this is a good first step towards that goal,” Sen. Lamar Alexander, R-Tenn., said in a statement.

USA, Nancy Pelosi, Health
Speaker of the House Nancy Pelosi talks to reporters during a news conference at the Capitol in Washington, Jan. 31, 2019. VOA

The complex plan would work by doing away with an exemption from federal anti-kickback rules that currently allows drugmakers, insurers and middlemen called pharmacy benefit managers to negotiate rebates among themselves.

Drug companies pay rebates to make sure their medications are covered by insurance plans that are the intermediaries between them and patients. HHS says hidden rebates can amount to up to 30 percent of a drug’s list price. Insurers say they use the money from rebates to hold down premiums for all consumers.

Under the plan, the current anti-kickback exemption for industry rebates would be replaced with a new one for discounts offered directly to consumers.

Azar said the idea would reshape the drug pricing system, shifting it away from hidden rebates to upfront discounts, creating pressure on drugmakers to keep prices down. The proposal was co-authored with the HHS inspector general’s office.

Potential consequences

Experts say it will take time to sort out all the potential consequences.

Peter Bach, director of the Center for Health Policy and Outcomes at New York’s Memorial Sloan Kettering Cancer Center, said the current system of rebates harms patients who take costly drugs with high copays.

Prince, Drugs, Overdose, Life expectancy
A mural honoring the late Prince adorns a building in the Uptown area of Minneapolis, Aug 28, 2016. The rock star died of an overdose at the age of 57. VOA

Think people with cancer, patients with intractable illnesses such as multiple sclerosis or rheumatoid arthritis, and those who take brand-name medicines with no generic competition. Patients’ cost sharing is often based on list prices, not the cost of the drug after rebates.

“Simply put, those on no medications at all will just see their premiums go up and see no savings because they don’t take any medicine,” said Bach. “Those on generics only may be essentially in this category (as well).

“But those on expensive medications … they will see savings in total,” he added. More than half a million people filled at least $50,000 in prescriptions in 2014, according to an Express Scripts report.

Insurers and pharmacy benefit managers like Express Scripts and CVS oppose the administration plan, saying it will undercut their ability to bargain with drugmakers for lower prices.

Companies please with plan

Drugmakers have applauded the administration’s action.

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Consumers are worried about prices for brand-name drugs, particularly new medications that promise breakthrough results. Generics account for nearly 90 percent of prescriptions filled, but brand-name drugs account for more than 70 percent of the spending.

Azar contends that under the current system everybody but the patient benefits from high prices. A high list price makes room for bigger negotiated rebates for insurers and middlemen. And drugmakers then merely build that expectation into their prices.

Before joining the Trump administration, Azar was a top executive for drugmaker Eli Lilly. That led to criticism that he would be an industry pawn. But the drugmakers vehemently disagree with some of his other ideas, including an experiment using lower international drug prices to cut some Medicare costs. (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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Trump, Trade, Policy
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.”

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“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.

Trump, Trade, Policy
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.

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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.

Trump, Trade, Policy
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.

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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)