Published: Sat, July 13, 2019
Health Care | By Cedric Leonard

Trump drops another drug pricing proposal after court blocks TV ad plan

Trump drops another drug pricing proposal after court blocks TV ad plan

Pharmaceutical tablets and capsules are arranged in the shape of a USA dollar sign on a table in this picture illustration taken August 20, 2014.

The Trump administration will no longer proceed with a large-scale overhaul of the drug-rebate industry. After mostly languishing this year, shares of companies that operate large pharmacy-benefit managers rallied, with CVS Health Corp. rising 7% to $59.23 at 9:35 NY, while UnitedHealth Group Inc. advanced 3% to $254.98.

Pharmaceutical company shares fell, with Merck & Co, Bristol-Myers Squibb Co and Pfizer Inc all off more than 2%.

"Shelving the rebate reform initiative, which pharma strongly supported, feels like payback", he added. Dick Durbin, the chamber's second-ranking Democrat, are pushing legislation that would grant the government such powers.

"The administration has abandoned one of the only policy solutions that would have truly lowered what patients are forced to pay out of pocket for the medicines they need", Jim Greenwood, head of the Biotechnology Innovation Organization, said in a statement.

"The decision was made was not prudent to go forward with the rule right now, that it would be too disruptive, that the risk was probably too high, and that it might upset a legislative deal, which is our primary focus", he said.

Pharmacy benefit managers (PBMs) negotiate a drug discount on behalf of health insurers and collect a commission for themselves as profit.

The proposed rule was also expected to raise Medicare premiums, while only saving money for some beneficiaries who spend a lot on medication.

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Democrats are expected to press Mueller about whether Trump sought to obstruct his investigation. Barr acknowledged he had previously said he did not object to Mueller testifying.

Trump claimed that prices had gone down for the first time in more than 50 years in 2018, although that has been widely disputed, and contradicts HHS Secretary Alex Azar's position that there were smaller and fewer drug price increases last year. "We believe that the key to lowering drug costs is to enact policies that encourage greater competition", JC Scott, chief executive of industry lobbyist Pharmaceutical Care Management Association, said in a statement.

The move marks yet another stumble for President Donald Trump in his quest to fulfill his campaign promise to reduce drug costs and comes as he's facing uphill court battles on several other top priorities.

Health and Human Services Secretary Alex Azar sparred with the Trump administration over the effectiveness of the strategy, according to Politico. Most European countries pay for citizens' healthcare and directly negotiate drug prices.

"The Trump Administration deserves credit for showing humility and restraint on the rebate rule, and more of it on drug prices would be welcome", the Journal said.

"Political momentum was building against the 2020 implementation of the CMS proposal to eliminate pharmaceutical rebates in government programs due to the perceived unintended windfall profits that might have accrued to pharmaceutical manufacturers", JP Morgan analyst Gary Taylor wrote in a research note.

On Monday, a federal judge ruled the Department of Health and Human Services overstepped its authority with its plan to force drugmakers to disclose list prices in advertisements.

But the White House announced Thursday that Trump had withdrawn his proposed rule.

White House spokesman Judd Deere said the White House hoped to collaborate with Congress on other approaches to lowering drug costs.

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