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Azar, Striking an Aggressive Tone, Suggests Trump Will Call Out Drug Companies Behind Major Price Hikes

HHS Secretary also addresses drug-related Medicare issues

Days after President Donald Trump delivered a speech on prescription drug prices that was notably light on criticism of the pharmaceutical industry, his health secretary on Monday struck a far more aggressive tone, warning that the administration would be “turning on the pressure” on drug makers, according to a STAT report.

The American public, Health and Human Services Secretary Alex Azar said, deserves to know which companies are “gouging consumers.”

Azar suggested that Trump would be quick to call out individual drug companies in the future.

“I can imagine he is going to be very interested in the next company that takes a price increase not justified by inflation or change in clinical benefit. I can tell you I wouldn’t have wanted to be the one to do that,” he said. “On the other hand, I expect the president will be interested in hearing which companies lowered their prices and took other actions to support the changes we want to make.”

In his remarks, Azar tore into a longstanding proposal—backed by numerous Democrats—to allow direct negotiation for Medicare’s Part D program to help bring down drug prices. At the same time, he made clear that the president remains interested in the idea.

“This is a topic the president and I have discussed at great length,” Azar said, “and the idea of direct negotiation in Medicare has come up. He is tired of the government getting bad deals on the drugs seniors need, and I couldn’t agree more.”

So far, investors in the pharmaceutical industry seem unfazed. Health care stocks were trading higher Monday following Trump’s address.

In his remarks, Azar outlined a presidential directive to “bring negotiation where it doesn’t exist,” merging Part B, Medicare’s program for physician-administered drugs, with Part D. The Part D program was implemented in 2006—when Azar was deputy health secretary and before he departed to become president of Eli Lilly’s U.S. subsidiary.

Azar also said the Centers for Medicare and Medicaid Services would be updating a drug pricing database that will “offer much more detail than ever before about which companies are raising prices.”

In his remarks, Azar also revisited a number of ideas he and Trump unveiled in a Rose Garden address on Friday: eliminating so-called “gag clauses” that prevent pharmacies from alerting patients of potential savings; re-examining the role of pharmacy benefit managers; and forcing drug makers to include list prices in television advertisements.

“Today I’m calling on America’s pharmaceutical manufacturers to level with the American public,” he said. “Be honest about what you’re trying to charge us and put your list prices in your ads. We believe Americans should know which drug companies are gouging consumers and which ones are being good actors for our communities.”

Azar similarly doubled down on his opposition to re-importation of drugs from Canada, a proposal that enjoys some bipartisan support in Congress, calling the idea a “gimmick.”

He also shed additional light on one of the biggest questions following Trump’s address: which of the proposals the administration would require Congress to implement. In a call-in to the “Hugh Hewitt Show” on Monday morning, Azar suggested that moving Part B drugs into the Part D program could require legislation.

He later acknowledged to reporters that overturning a cap on brand-name drug reimbursements under Medicaid would also require the approval of Congress.

Source: STAT; May 14, 2018.

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