The plan, known as the Most Favored Nation rule, would tie government payments for medicines to lower prices paid abroad. This could cut drug payments for Medicare by up to 30 percent and save some of the profits made by drug companies in one of their largest customer pools.
It is also part of a wider effort by the White House to keep Trump’s signature pledges for 2016 – in this case, cutting drug prices – before he leaves office in January.
Trump first launched the plan in May 2018, denouncing “foreign freeloaders” for raising prices Americans are paying. The idea’s momentum quickly waned, however, when drug manufacturers quickly resisted and criticized several Republicans who compared the idea to importing price controls from other countries, which, unlike the US, play an active role in setting drug prices.
The White House then used the international pricing plan to put pressure on the pharmaceutical industry, including an attempt this summer to squeeze price cuts out of the industry ahead of the elections. Officials revived the model last week, initially intending to release it as a proposed rule as part of Trump’s broader drug use agenda than The Hill first reported.
It is far from certain that the pharmaceutical industry will question the White House’s recent decision to make the directive the provisional final rule – without sifting through thousands of industry and public comments over the course of several months.
White House, HHS, and Centers for Medicare and Medicaid Services spokesmen did not respond to requests for comment.
After roughly two months in the Trump presidency, legal proceedings could easily stall the operation until President-elect Joe Biden takes office.
Administrative officials involved in drug pricing efforts have also questioned the legal justification for speeding up the process.
“Leaving office and not having time to go through the correct process as a proposed rule provides is not an emergency,” said an HHS official who was briefed on the plan.
The president revived the plan for 2018 with an executive order this summer calling it the “most favored nation rule”. While the original Medicare Part B approach focused only on physician-administered drugs, in August Trump ordered officials to expand the move to include drugs bought at the pharmacy counter in Part D – and which included virtually all major drugs sold to consumers were.
The latest version would be structured as a seven-year Medicare demonstration and mandatory model, three officials said, tying U.S. prices for affected drugs to those paid in a group of developed countries. However, according to two of these sources, this would only affect Medicare Part B. This means it would have minimal impact on Pfizer, where Part D drugs generate significant revenues.
It is not clear how the Biden government would handle this massive Medicare overhauls at the last minute. Biden has discussed the establishment of an independent review committee to evaluate drug values, another approach adopted by European countries.
The Most Preferred Nations Rule, and another proposal to remove discounts drug manufacturers pay to pharmacy performance managers, could be Trump’s final legacy in its drug cost control offering, which was once a major election promise and an integral part of addresses State of the Union was. While prescription drug price increases have slowed in recent years, costs have not declined, and other key proposals – such as a requirement to list prices in direct mail for consumers or a way for states to import cheaper drugs from Canada – never escaped .
“I’m lowering drug prices. I go with preferred nations that no president has the courage to do because you are taking action against Big Pharma, “said Trump during the first presidential debate against Biden.
The president-elect replied, “He has no health care plan. He has not cut drug bills for anyone.”
Adam Cancryn contributed to this report.