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President Trump Announces Blueprint to Lower Drug Prices

May 11, 2018

President Donald J. Trump released a blueprint to lower drug prices, identifying immediate actions and opportunities within federal payment programs. Those priorities include:

  • Increasing competition
  • Improving negotiation
  • Incentivizing lower list prices
  • Lowering out-of-pocket costs

The President’s blueprint calls for:

  • Greater transparency of drug prices
  • Better informing consumers about prescription drugs
  • Increased promotion of generic drugs
  • Experimenting with value-based payment

The skyrocketing price of prescription drugs places a significant financial burden on hospitals. As a result, hospitals are challenged to make difficult decisions about how to allocate limited resources. Pennsylvania hospitals are eager to explore policy avenues that provide relief.

During 2016, the American Hospital Association and Federation of American Hospitals commissioned a study on trends in hospital inpatient drug costs. The study helped inform policymakers about the impact of the cost of rising prescription drugs costs on hospitals and patients. More than 90 percent of surveyed hospitals reported that inpatient drug price increases had a moderate or severe effect on their ability to manage costs.

The strategy is consistent with an op-ed written by Alex Azar, Secretary of the Department of Health and Human Services (HHS) and other health leaders. The op-ed points to the burden of paying high prices for prescription medications as a threat to financial security and to ensuring all Americans have access to life-saving drugs and medical innovations.

The HHS officials identified four major problems with the drug market to target:

  • Addressing the increase in list prices of drugs
  • Maximizing the potential of government programs and private payers to leverage negotiating power
  • Tackling high out-of-pocket costs
  • Ensuring the practices of foreign markets are not disadvantaging American innovation

In the context of this conversation, federal policymakers should reject shortsighted policies such as reducing benefits of the 340B Drug Pricing Program that do not do anything to address drug prices. Such proposals stand to make it harder for hospitals to manage high drug costs and help patients.

HAP will review the policy proposals put forth in the blueprint in greater detail over the coming weeks. The association will work with federal policymakers on common-sense policies that will address the price of drugs, and the resulting pressure placed on hospital and patient budgets. Additionally, HAP continues to advocate to preserve the 340B Drug Pricing Program as a crucial tool for hospitals to stretch scarce resources to better serve vulnerable patients and communities across the commonwealth.

Please contact Laura Stevens Kent, HAPs vice president, federal advocacy, or Jolene Calla, Esquire, HAPs vice president, health care finance and insurance, with questions regarding federal policy work on drug prices.

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