Health and Human Services Secretary Alex Azar on Wednesday gave a sharp rebuke to Democratic reforms to give Medicare the power to directly negotiate for lower drug prices and let Americans buy cheaper drugs from Canada.
Azar’s comments during an event held by the American Enterprise Institute comes as the administration has taken heat from Democrats for not including their reforms in a major plan to combat high drug prices.
Azar said that HHS would bring negotiation capability to Medicare Part B, which is the section that reimburses doctors for drugs administered in a physician’s office, such as chemotherapy.
The goal is to use private vendors to negotiate for certain drugs for Medicare Part B.
He added that Medicare Part D, which is the program’s prescription drug plan, cannot negotiate for drugs in certain protected classes because of the importance of the products. Companies that make drugs in those protected classes have been raising prices and the Trump administration is “hamstrung by current rules for renegotiating drugs in these protected classes,” Azar said.
But Azar stopped short of embracing a popular reform from Democrats to give Medicare the power to negotiate directly with the manufacturer.
Under Medicare Part D, private health plans negotiate with a drugmaker for discounts to a drug sold on that plan. Democrats want to give Medicare that power instead of the private plans.
Azar shot down that idea by pointing to several estimates from the nonpartisan Congressional Budget Office that direct negotiation won’t generate any new savings.
“We are not skeptical of ideas because of direct negotiation due to ideology, but due to pragmatism,” he said.
He added the only way that direct negotiation would save money is by denying access to beneficiaries or setting “prices for drugs by government fiat.” The administration is opposed to that course of action.
Azar also bashed a reform popular with Sen. Bernie Sanders, I-Vt., which involves giving Americans the ability to buy cheaper drugs from Canada.
“It is a gimmick,” Azar said.
Canada’s drug market is too small to make a dent in high drug prices in the U.S., and companies may stop selling products to the country because they are concerned about re-importation into the U.S., Azar said.
“They are a lovely neighbor to the north, but they are a small one,” he said.
He added that the last four Food and Drug Administration commissioners have said there is no effective way to ensure that the drugs that come from Canada are actually from Canada or routed overseas from China or other countries.
“The last thing we need is open borders for unsafe drugs,” Azar said. “You can’t improve safety and lower drug prices by these gimmicks.”
