The White House Office of Management and Budget is reviewing a Trump administration proposal to reduce the prices of some prescription drugs by aligning them more with prices in other countries.
The International Pricing Index Model, first announced by the U.S. Department of Health and Human Services in October, would affect many drugs in Medicare Part B, which is the portion of Medicare that covers things like outpatient care, preventive services and more.
Medicare, a federal health insurance program, is available for those who are 65 or older, and for younger people who are disabled.
Americans pay the highest prices for prescription drugs in the world. In 2016, U.S. spending on prescription drugs totaled over $450 billion, a rate that’s two to six times higher than the world average.
The model would save taxpayers and patients more than $17 billion over five years, according to HHS. Under the model, Medicare would set a target price for drug payment, which would be 126 percent of the average prices other countries pay.
“At long last, the drug companies and foreign countries will be held accountable for how they rigged the system against American consumers,” President Donald Trump said in October.
Conservative and pharmaceutical groups have announced opposition to the proposal.
The Pharmaceutical Research and Manufacturers of America published an article in March claiming that the model would restrict access to care. In December, PhRMA sent comments to HHS that urged it to ditch the model and “instead pursue reforms grounded in market competition and patient-centered care.”
Fifty-seven conservative groups and activists sent a letter to HHS in November claiming the model would limit U.S. innovation and competition.
Longtime Republican Senator Chuck Grassley, said earlier this month that he is not in support of the proposal.
“I don’t think that this administration’s approach on international pricing is going to be to the benefit of the adoption of and research for modern drugs,” he told reporters.
Alan Sager, a professor at the Boston University School of Public Health, said the model was a “baby step in the right direction,” noting how the proposal only applies to some Medicare Part B drugs.
“Part of the difficulty is that the world’s drug makers have become addicted to high U.S. prices for drugs,” he told The Globe Post. “We are their shock absorber. We’re the worldwide shock absorber.”
Sager said the U.S. allows companies to charge unnecessarily high prices.
“If we don’t like high prices, it’s up to us to fix it,” he said.
As changes are made, Sager said, “We would need to make sure of continuity in financing research.”
“That’s why it’s important to proceed carefully,” he said.
An Associated Press investigation from 2018 reported that during the first seven months of the year, there were 96 price hikes for every price cut in drug prices. Though, AP wrote that “the number of increases slowed somewhat and were not quite as steep as in past years.”
During the first quarter of 2019, Rx Savings Solutions said the list prices increased for more than 3,000 drugs and decreased for 117 drugs.
A spokesperson for Rx Savings Solutions told The Globe Post in an email last week that no report was available for distribution about those numbers.
