President Trump on Friday said his administration is “very much eliminating the middlemen” who have contributed to high drug prices.
Trump’s rhetoric during his White House Rose Garden speech mirrors other criticisms from top administration officials about middlemen called pharmacy benefit managers who negotiate with drug makers on behalf of employer and union health plans. He also took aim at foreign companies that get pharmaceuticals for much less than U.S. consumers.
“We are very much eliminating the middlemen, the middlemen became very, very rich,” Trump said. “They won’t be so rich any more.”
Trump did not divulge any specifics on how he would eliminate pharmacy benefit managers, which are a multibillion-dollar industry.
A blueprint released by the administration said the healthcare market has too many incentives that “reward higher list prices, and [the Department of Health and Human Services] is interested in creating new incentives to reward drug manufacturers that lower list prices or do not increase them.”
The president’s budget also includes several proposals to revamp Medicare Part D, the program’s drug prescription plan, to prompt pharmacy benefit managers and insurers to share with consumers more of the rebates they get from drug makers.
But none of the actions in the blueprint aims to eliminate the pharmacy benefit manager’s role.
Trump’s comments come after HHS Secretary Alex Azar and Food and Drug Administration Commissioner Scott Gottlieb bashed PBMs in recent speeches. The officials have said that the pharmacy benefit managers do not share enough of their rebates with consumers and that they are gaming the system.
PBM giant Express Scripts appeared to take Trump’s comments in stride. The company lauded Trump for recognizing that drug companies charge too much. “It is clear, based on today’s comments, that our role has never been more important to improving healthcare,” the company said.
Trump also said the administration will target in new trade agreements the low prices that other countries pay for U.S.-manufactured drugs.
Other countries, especially Canada and European countries, pay less for pharmaceuticals than U.S. consumers do because of negotiating power by their government-run, single-payer healthcare systems.
“When foreign governments extort unreasonably low prices from U.S. companies, Americans have to pay more to subsidize the enormous costs of research and development,” he said. “You can look at the some of the countries, and the medicine is a tiny fraction of what the medicine costs in the U.S.”
Trump said he has directed U.S. Trade Representative Robert Lighthizer to “make fixing this injustice a top priority with every trading partner.”
