President Donald Trump and Secretary Of Health And Human Services Alex Azar announced a new plan to lower prescription drug prices from the Rose Garden at the White House on Friday.
Azar explains more details about Trump's plan, called "American Patients First," at the White House briefing later Friday afternoon.
Azar said the administration is calling into question the entire system of rebates as the method of negotiating discounts in the pharmacy channel.
"Because right now, every incentive is for the drug company to have a very high list price and to negotiate list price down, often in a very nontransparent way," he said in a press briefing following the Rose Garden speech.
One suggestion: "Think about all the time that everybody spends watching drug company ads on TV and how much information companies are required to put in them. If we want to have a real market for drugs, why not have them disclose their prices in the ads, too?"
PRESIDENT TRUMP: Today, my administration is launching the most sweeping action in history to lower the price of prescription drugs for the American people. We've wanted to be doing this. We've been working on it right from day one. It's been a complicated process, but not too complicated. And today, it's happening.
We will have tougher negotiation, more competition and much lower prices at the pharmacy counter, and it'll start to take effect very soon.
My administration has already taken significant steps to get drug prices under control.
We reformed the Drug Discount Program for Safety Net Hospitals to save senior citizens hundreds of millions of dollars on drugs this year alone.
We're also increasing competition and reducing regulatory burdens so drugs can be gotten to the market quicker and cheaper.TRUMP: We're very much eliminating the middlemen. The middlemen became very, very rich, right?
Whoever those middlemen were -- a lot of people never even figured it out -- they're rich. They won't be so rich any more.
Last year, the FDA approved more than 1,000 low-cost generics, the most in history, which has already saved the American people nearly $9 billion.
Thank you, Scott.
Next, we're going to take on one of the biggest obstacles to affordable medicine: the tangled web of special interests. Not too many are sitting here today, but they used to be here all the time.
The drug lobby is making an absolute fortune at the expense of American consumers. No industry spends more money on lobbying than the pharmaceutical health products industry. Last year, these companies spent nearly $280 million on lobbyists. That's more than tobacco, oil and defense contractors combined.
Health insurance companies and other providers spent another $200 million to protect the status quo and to keep prices artificially high. And they've been very successful, doing it for many, many years.
Everyone involved in the broken system -- the drug makers, insurance companies, distributors, pharmacy benefit managers and many others contribute to the problem.
Government has also been part of the problem because previous leaders turned a blind eye to this incredible abuse. But, under this administration, we are putting American patients first.
Thank you. I've instructed Secretary Azar to begin moving forward on reforms that will bring soaring drug prices back down to Earth. Our plan takes steps to derail the gravy train for special interests by ending Obamacare's twisted incentives that actually encourage higher drug prices.
It also gives Medicare Part D plans new tools to negotiate lower prices for more drugs and make sure that Medicare Part D incentives encourage drug companies to keep prices low. There's a big incentive to do that.
We are not going to reward companies that constantly raise prices, which, in the past, has been most companies. Frankly, Alex used to run one of them, so nobody knows the system better than Alex. That's what we needed. Our -- and a very successful one.
Our plan will end the dishonest double dealing that allows the middleman to pocket rebates and discounts that should be passed on to consumers and patients.
Our plan bans the pharmacist gag rule, which punishes pharmacists for telling patients how to save money.
This is a total rip-off, and we are ending it.
We are getting tough on the drug makers that exploit our patent laws to choke out competition. Our patent system will reward innovation, but it will not be used as a shield to protect unfair monopolies.
TRUMP: The FDA will also speed up the approval process for over-the-counter medicines so that patients can get more medicines without prescription.
Finally, as we demand fairness for American patients at home, we will also demand fairness overseas. When foreign governments extort unreasonably low prices from U.S. drug-makers, Americans have to pay more to subsidize the enormous cost of research and development. In some cases, medicine that costs a few dollars in a foreign country costs hundreds of dollars in America for the same pill with the same ingredients in the same package made in the same plant, and that is unacceptable.
You can look at some of the countries, their medicine is a tiny fraction what the medicine costs in the USA. It's unfair and it's ridiculous and it's not going to happen any longer.
It's time to end the global freeloading once and for all.
I have directed U.S. Trade Representative Bob Lighthizer to make fixing this injustice a top priority with every trading partner. And we have great power over the trading partners. You're seeing that already.
America will not be cheated any longer, and especially will not be cheated by foreign countries. The American people deserve a health care system that takes care of them, not one that taxes and takes advantage of our patients and our consumers and our citizens.
These reforms are just the beginning.
In the coming weeks we will work with Congress to pass legislation that will save Americans even more money at the pharmacy. For that, we need the help of Congress and we think it will be forthcoming.
We will work every day to ensure all Americans have access to the quality, affordable medication they need and they deserve. And we will not rest until this job of unfair pricing is a total victory for the USA. It will happen and it's going to happen quickly.
So thank you again, everybody in the audience. Thank you, Secretary Azar.
And I'd like to ask the secretary, a very talented man, to come up and do a little explanation. Because we're going to see those prices go down; it'll be a beautiful thing to watch. Thank you.
AZAR: Well, thank you very much, Mr. President, for that powerful call to action and your leadership on this issue.
I can tell you, I interact with the president about every three days by phone or in person. And there has not been one discussion with the president in any circumstance where drug pricing and bringing down drug prices has not been the first and last thing that he has mentioned to me.
You have made it clear how important it is to bring down health care costs for the American people, and get better deals on drug pricing in particular.
That's why you made history today, by laying out the most comprehensive action plan for drug affordability of any president in our history.AZAR: The problem of high prescription drug cost is something that's been talked about in Washington for a long time. But that's all it's been: talk, talk, talk. We're privileged to have a president finally taking action by laying out a blueprint for solving these problems using private-sector competition and private-sector negotiation.
We're not going to propose cheap political gimmicks. The president's blueprint is a sophisticated approach to reforming and improving this unbelievably complex system. Everybody at HHS is rolling up their sleeves to get to work on this.
Let me just give a couple of examples: Think about all the time that everybody spends watching drug company ads on TV and how much information companies are required to put in them. If we want to have a real market for drugs, why not have them disclose their prices in the ads, too?
Consumers would have much more balanced information, and companies would have a very different set of incentives for setting their prices. We're immediately going to look into having the FDA require this.
President Trump has called for tougher negotiation and better deals, so we're going to deliver on that, too. Our blueprint brings the latest negotiation tools to our government programs. It also expands private-sector negotiation to parts of Medicare, where, right now, HHS just gets the bill, and we pay it.
These are just some of the more than 50 actions that HHS has planned or has under consideration in the blueprint for action released today. This is not a one-and-done deal. It is a comprehensive process, and, as the president said, it will take time to reorder an entire complex, multibillion-dollar system of our economy. But we are going to drive real change in the system, while continuing to lead the world in innovation and patient access to medicine.
So thank you again, Mr. President, for your vision, your leadership. We're eager to get to work. With real competition and with the right incentives, your blueprint is going to finally put American patients first.
And, at this point, I will be joining Sarah Huckabee Sanders for the press briefing this afternoon, able -- able to take questions to provide more detailed information of all of the elements of the president's plan. So thank you very much.