Trump tackles the”affordability”of medication
Trump has made another deal:
In his latest effort to lower drug costs, President Donald Trump unveiled Friday “Most Favored Nation” pricing deals with nine more pharmaceutical companies.
The president also announced he would call a meeting next week or early January with health insurers to push them to lower their premiums.
More:
The agreement reached with the nine companies also encompasses $150 billion in combined new investment commitments in domestic manufacturing, research and development of pharmaceuticals.
“For the American people and patients, this represents the greatest victory for patient affordability in the history of American healthcare,” Trump said. “By far, and every single American will benefit.”
Note the “a” word: “affordability.”
Trump added:
“Every president for a generation has promised to reduce drug prices, but they were talking about a little bit,” Trump said. “I am the only one of them to ever even think in terms of favored nations, and that’s what this is. … We are now ‘a most favorite nation.’”
Many a slip between cup and lip. From the linked article:
Very few Americans buy any of their drugs from the manufacturers. They buy them from retail pharmacies at a price negotiated by their insurer’s pharmacy benefits manager. 80% of the market is covered by three PBMs: CVS Caremark, Cigna Express Scripts, and Optum Rx.
It’s a step in the right direction, perhaps, but a small one, and the middlemen can easily soak up most of any savings.
It’s not a “conservative” effort. Only a free-market reform of the health care and pharmaceuticals industries could be called that. But since we don’t have such a thing, a step in the right direction might be good.
It’s not clear that the president has the power to control the prices charged for drugs to consumers in general, absent congressional action…but he probably does have the power to do that for drugs the government purchases/pay for as part of Medicare Part D and other programs.
Companies write MFN clauses into contracts all the time, I’ve even grumpily agreed to a few of them.
https://millermeeks.house.gov/media/press-releases/house-passes-miller-meeks-lower-health-care-premiums-all-americans-act
There’s a 111 page health bill available to read, but the few talking points are small, positive steps. Which is the conservative way to progress towards a better health care system.
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@Tom Grey:he few talking points are small, positive steps. Which is the conservative way to progress towards a better health care system.
That’s what we were doing for 80 years and that’s how we got to where we are, with health care costs rising at double the rate of inflation for the last 50 years.
(You will look in vain for any effects of Obamacare on that graph, for good or bad.)
It’s not going to get better until it breaks and something actually new can take it’s place.
Most working-age Americans are offered a narrow selection of health insurance coverage through their employer. They pay thousands of dollars a year for their share of the premium, before ever seeing a doctor or filling a prescription, and then they have a deductible in the thousands of dollars before their insurance pays a dime, and every year it’s been going up by 5 – 10% for 50 years.
That’s not because insurance companies are keeping all the money. Drug costs have been going up, facility costs have been going up, provider costs have been going up.
Seems like another set of barnacles on the ship. Everything Congress touches seems that way. IMO, ‘incremental’ approaches might be apposite (if suboptimal) in addressing certain policy issues (e.g. provision of schooling or local land use planning) but haven’t been of much help in re the finance of medical care and long term care.
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There are welfare efficiencies in unregulated prices provided the information imperfections in your market are addressed. However, at some level in the provision of medical care and ltc, costs must be socialized.
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One problem with the ‘affordability’ discourse is that it addresses people’s irritation at the charges they see. The trouble is, the charges they see incorporate a mess of cross subsidies. The road to efficiency is paved with more transparent prices. Making transparent what was previously opaque bothers people. It should not but it does.
We buy our drugs from Express Scripts, the PBM for Tricare for Life. In 2018 our copays for most drugs were $9. We’re now paying $19 – $39.
I doubt this deal will influence what we’re paying. One can hope, but I don’t think Trump and the GOP understand how healthcare costs are arrived at. They seem to be in the hands of big clinics, pharmacy benefit managers, and insurance companies. And profit is the main driver. No one wants to give up their profit.
I’m old enough to remember when the local doctor had a price list posted on his wall. I also remember house calls. He often took less than advertised because he knew what people could pay. Even so, he was the wealthiest man in town.
I also remember when there were no health insurance policies. People all paid on time payment plans and some care was done pro-bono. That was when medicine was a calling to help the sick. It has morphed into a huge, for-profit industry. Could we go back to the days when medical care was mostly a humanitarian service where profit wasn’t important? Probably not.