Trump stepped back from the some of the sweeping proposals he offered on the campaign trail, like having Medicare negotiate drug prices, but still leveled pointed criticism at the industry. The U.S. now funds more than 70 percent of profits from brand named drugs among countries part of the Organization for Economic Co-operation and Development, while also having the highest per-capita spending on pharmaceuticals overall.
Trump called out industry middlemen and foreign countries for "freeloading." . "The middlemen became very, very rich. ..." Industry experts were unmoved.
In the plan, the administration correlates the "hidden negotiation and wealth transfer" from drug manufacturers to PBMs with the increase in out-of-pocket costs for consumers. "The drug prices have gone through the roof". Because of the drug companies folks.
Trump was speaking as his health deputies released a series of proposals to address high drug costs.
"We expect President Trump's upcoming speech on lowering drug prices to be rhetorically critical of pharmaceutical manufacturers and the supply chain, but he will not propose actions that actually threaten drugmakers' ability to set high prices for their product", Height Capital Markets analyst Andrea Harris said in an interview with MarketWatch on Friday.
"You can look at some of the countries, their medicine is a tiny fraction what the medicine costs in the USA".
The president also spoke of ending trade practices overseas that lead to unfair prices for Americans.
In a quick follow-up, HHS Secretary Alex Azar raised one specific proposal that aimed at shaming pharma companies by forcing them to include the price of the drugs they promoted in advertising. "If not, all of this other stuff seems like window dressing, important window dressing, but window dressing". Now the president's new plan would give consumers more information in hand before they head out to drug stores. But the plan didn't address a safe harbor for value-based arrangements and the legal risks related to kickback laws and off-label promotion, she said.
President Trump also said he is considering requiring firms to identify drug costs in advertisements.
Investors appeared unconcerned ahead of Trump's speech.
The US spent $1,443 per capita on pharmaceutical costs in 2016, compared to a range of $466 to $939 in 10 other high income countries, including the UK, Australia, Canada and Japan, according to a study in the Journal of the American Medical Association.
"They're breathing a sigh of relief in pharmaceutical board rooms across the country", said Sen. "It's unfair and it's ridiculous, and it's not going to happen any longer".
Members of Congress benefit heavily from the pharmaceutical industry's donations. Health plans provide more favorable formulary placement in exchange for the rebates.
Public outrage over drug costs has been growing for years as Americans face pricing pressure from multiple sources: New medicines for life-threatening diseases often launch with prices exceeding $100,000 per year.