Trump introduces plan to lower Medicare drug costs, end 'global freeloading'

[TU Curmudgeon]

From United Press International

Trump introduces plan to lower Medicare drug costs, end 'global freeloading'
​

Oct. 25 (UPI) -- President Donald Trump introduced a plan to allow Medicare to pay lower drug prices for Part B coverage.

Trump said the plan, known as the International Pricing Index, would end "global freeloading" by having the Department of Health and Human Services permit Medicare to set payments for drugs at a target price based on the discounts drug companies give other countries.

"For decades, other countries have rigged the system so that American patients are charged much more ... for the exact same drug," Trump said at HHS headquarters Thursday.

The HHS said Medicare currently pays 180 percent of what other wealthy countries pay for the highest cost physician-administered drugs.

COMMENT:-

One does wonder if this blatant attempt at government price fixing to the detriment of companies that have self-sacrificially spent billions of dollars in order to develop proprietary products actually qualifies as "draining the swamp and reducing regulations".

That being said, reducing the ridiculously high profit margins on the medications that people require isn't something that I find personally repugnant.

However, one thing about what Mr. Trump said strikes me as slightly out of touch with reality, and that is the claim that the purchasers outside the US are being "subsidized" because they take the position "We won't pay the MSRP, but we will pay this much." and the drug manufacturers take the position "Well, the profit isn't as big as we would like it to be - but it's still a profit, so you have a deal.".

That process is what is known as "negotiation" so that the parties can arrive at "The Deal", and Mr. Trump has always taken the position that you should pay as little for what you want as possible (and pay even less than you agreed to pay if you can get away with it).

In short, Mr. Trump condemns other countries for doing business the same way that he says that business should be conducted.

PS - What the American consumers are "subsidizing" is NOT the cost of the drugs that the American companies are selling to other countries at a profit, but rather the American consumers are "subsidizing" the profits of the American drug companies. Those "other countries" have not "rigged the system" so that American consumers pay more since those "other countries" have no control over what the American companies charge the American consumers. The ones that have, indeed, "rigged the system" so that American consumers pay more are the ones that set the prices that American consumers pay, and those are the American drug manufacturers.
​

 

[Hicup]

He happens to be right about this, drugs in Canada are by far way less than they are here. All these European nations told the drug companies 15 years ago (roughly) that this is the price, take it or leave it. The US is lagging behind on this one, and has been for decades!


Tim-

 

[Carjosse]

So single-payer?

 

[Carjosse]

He happens to be right about this, drugs in Canada are by far way less than they are here. All these European nations told the drug companies 15 years ago (roughly) that this is the price, take it or leave it. The US is lagging behind on this one, and has been for decades!


Tim-

And that is due to the various single-payer systems in those countries. When you represent an entire country or region you have a lot of bargaining power. Imagine the bargaining power the US or even individual states would have in a single-payer system.

 

[Hicup]

And that is due to the various single-payer systems in those countries. When you represent an entire country or region you have a lot of bargaining power.

agreed, this is certainly one of the truly remarkable benefits of a single payer system, the question though, is, do all the benefits outweigh the negatives, AND of course, for us here in the US, who much does it all cost, and can we afford it? Lots of things to debate surrounding healthcare, for sure.


Tim-

 

[Deuce]

agreed, this is certainly one of the truly remarkable benefits of a single payer system, the question though, is, do all the benefits outweigh the negatives, AND of course, for us here in the US, who much does it all cost, and can we afford it? Lots of things to debate surrounding healthcare, for sure.


Tim-

Every single-payer system in existence is substantially less expensive than what we have here. As is every single other implementation of universal healthcare. So, if you're looking for negatives, cost is clearly not one of them. Unless your argument is for American Unexceptionalism, a theory in which the United States is somehow uniquely incompetent and cannot perform as well as every other industrialized nation on the planet in this.

 

[Hicup]

Every single-payer system in existence is substantially less expensive than what we have here. As is every single other implementation of universal healthcare. So, if you're looking for negatives, cost is clearly not one of them. Unless your argument is for American Unexceptionalism, a theory in which the United States is somehow uniquely incompetent and cannot perform as well as every other industrialized nation on the planet in this.

Ask Canadian's if they feel the same way about their free healthcare.. It ain't free bro...


Tim-

 

[What if...?]

He happens to be right about this, drugs in Canada are by far way less than they are here. All these European nations told the drug companies 15 years ago (roughly) that this is the price, take it or leave it. The US is lagging behind on this one, and has been for decades!


Tim-

I can get three identical asthma inhalers in mexico for what my copay is here for one. Nine or ten for what full price is here.

It is ridiculous.

 

[Napoleon]

Every single-payer system in existence is substantially less expensive than what we have here. As is every single other implementation of universal healthcare. So, if you're looking for negatives, cost is clearly not one of them. Unless your argument is for American Unexceptionalism, a theory in which the United States is somehow uniquely incompetent and cannot perform as well as every other industrialized nation on the planet in this.

Cost most certainly is one of them. It may be less expensive overall what with all of the price regulations and nationalization of healthcare providers, but it most certainly is not less expensive where it matters - on an individual basis - for the majority of people.

 

[Deuce]

Ask Canadian's if they feel the same way about their free healthcare.. It ain't free bro...


Tim-

Nobody used the word "free" except you, bro.

 

[Deuce]

Cost most certainly is one of them. It may be less expensive overall what with all of the price regulations and nationalization of healthcare providers, but it most certainly is not less expensive where it matters - on an individual basis - for the majority of people.

No it literally is less expensive, by a wide margin, on an individual basis.

The US has the highest per-capita total healthcare expenditures on a planet and it's not even a close race.

 

[ElChupacabra]

Ask Canadian's if they feel the same way about their free healthcare.. It ain't free bro...


Tim-

I think that's a key distinction people should make when referring to these kind of systems, because they are not "free". The citizens of certain countries are taxed at a much higher rate in order to pay for a single payer healthcare and education. I think a hybrid system is the way it would make the most sense in the US.

 

[ElChupacabra]

No it literally is less expensive, by a wide margin, on an individual basis.

The US has the highest per-capita total healthcare expenditures on a planet and it's not even a close race.

Indeed. Which is why the debate should be around how incredibly inefficient it is from a cost perspective rather than the usual rabbit holes the debate leads to (i.e. self sufficiency, personal responsibility etc.). What I find odd is that pro-business people don't take issue with private entities having to subsidize their employees' healthcare costs. What started out as a perk is now relied on to provide a large percentage of the population with affordable healthcare access.

 

[Rosie1]

It's not a new idea (lowering drug costs). The democrats have been trying to do it for years. The drug company lobbies are very powerful. I wish Trump success on this, but I won't hold my breath.

Does Canada have even have Lobbyists?

 

[JustHanging]

So single-payer?

But Trump said it, so NOT socialism. Nuh uh!

 

[JustHanging]

Ask Canadian's if they feel the same way about their free healthcare.. It ain't free bro...


Tim-

Nope, but we pay roughly 65% of what you pay on a per capita basis, and get better outcomes.

 

[ttwtt78640]

Nope, but we pay roughly 65% of what you pay on a per capita basis, and get better outcomes.

You seem to do better on military spending as well. That may be due to not letting our congress critters run the show - but that is just a guess.

 

[HumblePi]

He happens to be right about this, drugs in Canada are by far way less than they are here. All these European nations told the drug companies 15 years ago (roughly) that this is the price, take it or leave it. The US is lagging behind on this one, and has been for decades!


Tim-

But isn't that precisely the reason why elderly people on a fixed income and those with long-term illnesses purchase their medications by mail from Canadian pharmacies? As the OP said, the U.S. allows drug companies to name their own price on drugs and that's just not the norm in other countries. We allow “government-protected monopolies” for certain drugs, preventing generics from coming to market to reduce prices. Application backlogs at the FDA have led to delays of three or four years before generic manufacturers can win approval to make drugs not protected by patents. So even if a very expensive drug goes off patent, it still takes the FDA to approve generics for other manufacturers. Not only that, but a company selling drugs like Eliquis or Humira for example, are able to get patents that protect their drug for 20 years and at the end of that term they are likely to be approved for a continuation of that patent. The drug prices really aren't justified by the research and development cost. Humira for example costs, without insurance, between $1800 and $2400 for the month (2 doses).

Speaking as a medical person I feel that the legal raping of Americans by big pharmaceutical companies is a horrible black stain on this country. Taking financial advantage of people that are struggling to pay their bills is something no other developed country does. Now if Trump thinks that he's going to convince big pharma into negotiating their prices for some of these premier drugs, he's either sadly mistaken or lying to you. Half or more of every man sitting in Congress today is bought and paid for by 'big pharma'. The drug lobbyists are some of the wealthiest in Washington, probably second only to the NRA and big oil companies.

 

[TU Curmudgeon]

He happens to be right about this, drugs in Canada are by far way less than they are here. All these European nations told the drug companies 15 years ago (roughly) that this is the price, take it or leave it. The US is lagging behind on this one, and has been for decades!


Tim-

You forgot the word "socialist" in your "All those **S*O*C*I*A*L*I*S*T** European nations ...".

 

[TU Curmudgeon]

agreed, this is certainly one of the truly remarkable benefits of a single payer system, the question though, is, do all the benefits outweigh the negatives, AND of course, for us here in the US, who much does it all cost, and can we afford it? Lots of things to debate surrounding healthcare, for sure.


Tim-

If one assumes that the US would be 50% as efficient as Canada is with its "Single Payer" system, that would mean that the actual cost of the US health care system would come down by around 30%.

Where the money to pay the premiums with would come from is not all that difficult a question to answer, and the answer is "From the same place it is coming now.". If an employer was currently offering a "no direct contribution" employee healthcare package, the employer would be able to roll that plan over into the single payer plan at no increase in cost. If the individual were buying their medical insurance privately, the individual would be able to roll that coverage over into the single payer plan at no increase in cost. The savings resulting from the increased efficiency of the single payer system would fund the 10% of Americans who don't already have medical insurance AND leave a bunch left over to improve benefits.

The "But Where's The Money Going To Come From" doom sayers are operating on the basis of [1] the employers stop paying and get to keep the money they used to pay in premiums, [2] the private individuals stop paying but the money they used to pay vanishes, and [3] everyone will be taxed to pay without any increase in income to offset the taxes.

 

[JustHanging]

You seem to do better on military spending as well. That may be due to not letting our congress critters run the show - but that is just a guess.

Yeah, plus you can pick up a good hockey stick for only $30.00.

 

[Hicup]

But isn't that precisely the reason why elderly people on a fixed income and those with long-term illnesses purchase their medications by mail from Canadian pharmacies? As the OP said, the U.S. allows drug companies to name their own price on drugs and that's just not the norm in other countries. We allow “government-protected monopolies” for certain drugs, preventing generics from coming to market to reduce prices. Application backlogs at the FDA have led to delays of three or four years before generic manufacturers can win approval to make drugs not protected by patents. So even if a very expensive drug goes off patent, it still takes the FDA to approve generics for other manufacturers. Not only that, but a company selling drugs like Eliquis or Humira for example, are able to get patents that protect their drug for 20 years and at the end of that term they are likely to be approved for a continuation of that patent. The drug prices really aren't justified by the research and development cost. Humira for example costs, without insurance, between $1800 and $2400 for the month (2 doses).

Speaking as a medical person I feel that the legal raping of Americans by big pharmaceutical companies is a horrible black stain on this country. Taking financial advantage of people that are struggling to pay their bills is something no other developed country does. Now if Trump thinks that he's going to convince big pharma into negotiating their prices for some of these premier drugs, he's either sadly mistaken or lying to you. Half or more of every man sitting in Congress today is bought and paid for by 'big pharma'. The drug lobbyists are some of the wealthiest in Washington, probably second only to the NRA and big oil companies.

I can agree to some extent, but the real problem as I see with big pharma, is two-fold. One, all drug companies pay hundreds of millions of dollars in the US to get their drugs approved, so in return, there's been this quid-pro-quo sort of **** going on, an that's one reason they're so expensive here, simply because our government critters all have their pockets lined. Two, the rest of the world knows that the US FDA has the most stringent guidelines for drug approval, and as such, simply wait for the US FDA to approve a drug, and waste zero capital in other nations, essentially subsidizing drug approval through the USA. Hence, other nations don't even have anywhere near the same approval process that the USA has, and simply rely (Although they would never admit this to their public) on the USA to let the rest of the world know, ok it's ok to use this drug now..

What we get as American's who need these drugs, is shafted! Plain and simple! In short, the richest nation in human history subsidizes the cost of drug approval for the rest of the world, BUT we get left with the bill. Trump surely knows this is going on, and something needs to be done about it, but with an unwilling congress, he might not be able too.


It's a mess, and it's all about the money!


Tim-

 

[ThoughtEx.]

From United Press International

Trump introduces plan to lower Medicare drug costs, end 'global freeloading'
​

Oct. 25 (UPI) -- President Donald Trump introduced a plan to allow Medicare to pay lower drug prices for Part B coverage.

Trump said the plan, known as the International Pricing Index, would end "global freeloading" by having the Department of Health and Human Services permit Medicare to set payments for drugs at a target price based on the discounts drug companies give other countries.

"For decades, other countries have rigged the system so that American patients are charged much more ... for the exact same drug," Trump said at HHS headquarters Thursday.

The HHS said Medicare currently pays 180 percent of what other wealthy countries pay for the highest cost physician-administered drugs.

COMMENT:-

One does wonder if this blatant attempt at government price fixing to the detriment of companies that have self-sacrificially spent billions of dollars in order to develop proprietary products actually qualifies as "draining the swamp and reducing regulations".

That being said, reducing the ridiculously high profit margins on the medications that people require isn't something that I find personally repugnant.

However, one thing about what Mr. Trump said strikes me as slightly out of touch with reality, and that is the claim that the purchasers outside the US are being "subsidized" because they take the position "We won't pay the MSRP, but we will pay this much." and the drug manufacturers take the position "Well, the profit isn't as big as we would like it to be - but it's still a profit, so you have a deal.".

That process is what is known as "negotiation" so that the parties can arrive at "The Deal", and Mr. Trump has always taken the position that you should pay as little for what you want as possible (and pay even less than you agreed to pay if you can get away with it).

In short, Mr. Trump condemns other countries for doing business the same way that he says that business should be conducted.

PS - What the American consumers are "subsidizing" is NOT the cost of the drugs that the American companies are selling to other countries at a profit, but rather the American consumers are "subsidizing" the profits of the American drug companies. Those "other countries" have not "rigged the system" so that American consumers pay more since those "other countries" have no control over what the American companies charge the American consumers. The ones that have, indeed, "rigged the system" so that American consumers pay more are the ones that set the prices that American consumers pay, and those are the American drug manufacturers.
​

Is this a typo where it says for Part B coverage, because Part B does not cover prescriptions, it covers drugs you receive while under care of a physician. As in what they give you at the hospital, or what your doctor gives you in his office and bills you for. Part B is 80/20, Medicare pays the 80 . This might lower the premium from 119 a month, that seniors pay, to 115 a month. Might. Most likely will not affect the premium at all.

Or is it supposed to say Part D, which is what deals with Prescriptions, and what prevents carriers of medicare part d from negotiating with drug companies. And what is bankrupting seniors regularly when SS is their only income.

If all this accomplishes is making drugs cheaper for hospitals that mark those up 500 percent anyway, then no thanks. Doesn't help anyone but the people who own and are invested in hospitals.

 

[TU Curmudgeon]

In short, the richest nation in human history subsidizes the cost of drug approval for the rest of the world, BUT we get left with the bill. Trump surely knows this is going on, and something needs to be done about it, but with an unwilling congress, he might not be able too.


It's a mess, and it's all about the money!


Tim-

The cost of obtaining approval of any new drug is a part of the cost of production.

Let's assume that the other 190(ish) countries in the world all had their own drug approval processes. Let's also assume that it costs $1,000,000 to get the drug approved in the US but only 1/10th of that in each of the other countries.

If that were the case then the (drug approval) portion of the cost of production woul190*100000d be $191,000,000 (which would be factored in when setting the selling price for the drugs BOTH inside and outside of the US).

If none of the other countries had their own drug approval process, then the (drug approval) portion of the cost of production would be $1,000,000 (which would be factored in when setting the selling price for the drugs BOTH inside and outside of the US).

If there were only 1,000,000 units of the drug produced, and if the remainder of the cost of production worked out to $1.00 per unit, then, if the other countries all had their own drug approval process, the base from which the drug companies would calculate their selling price would be $21 per unit.

If there were only 1,000,000 units of the drug produced, and if the remainder of the cost of production worked out to $1.00 per unit, then, if none of the other countries had their own drug approval process, the base from which the drug companies would calculate their selling price would be $2.00 per unit.

I have not factored in any "profit" to arrive at any actual selling price, but a 10% profit would result in a selling price of $23.1 per unit in the first example and a selling price of $2.20 in the second example.

So (bearing in mind that the numbers above are only for illustrative purposes [and assuming that I did the arithmetic correctly {not always a sure bet}]) I ask you "What 'subsidy'?".

 

[TU Curmudgeon]

Is this a typo where it says for Part B coverage, because Part B does not cover prescriptions, it covers drugs you receive while under care of a physician. As in what they give you at the hospital, or what your doctor gives you in his office and bills you for. Part B is 80/20, Medicare pays the 80 . This might lower the premium from 119 a month, that seniors pay, to 115 a month. Might. Most likely will not affect the premium at all.

Or is it supposed to say Part D, which is what deals with Prescriptions, and what prevents carriers of medicare part d from negotiating with drug companies. And what is bankrupting seniors regularly when SS is their only income.

If all this accomplishes is making drugs cheaper for hospitals that mark those up 500 percent anyway, then no thanks. Doesn't help anyone but the people who own and are invested in hospitals.

Good question - I don't know (but I wouldn't put it past the major media to make typographical errors).

Good point. Reducing the costs of purchase for the people who resell in a captive market with no competition seldom results in a reduction of the price that those re-sellers charge. It does, however, almost universally, result in an increase in the profits that those re-sellers make.

Obviously, the simple solution - if you don't like what appears to be happening - is for you to go out and start your own hospital.

Right?