"It's hard to take the Trump administration and Republicans seriously about reducing health care costs for seniors two weeks before the election when they have repeatedly advocated for and implemented policies that strip away protections for people with pre-existing conditions and lead to increased health care costs for millions of Americans", said Senator Chuck Schumer of NY, the Democratic leader, The Times reported. He says Americans are now going to pay the prices other countries pay.
Azar complained that critics have already gotten personal.
Under the plan announced by HHS, Medicare payments for drugs administered in doctors' offices would gradually shift to a level based on worldwide prices.
Azar said more plans are being developed on drug costs. "This happens because the government pays whatever price the drug companies set without any negotiation whatsoever". That program was abruptly halted in December 2017, in response to pushback from oncologist and rheumatologists.
It didn't change the underlying acquisition cost but instead simply reduced reimbursement, he continued.
"And I'd say, 'Why is this?' I never knew that I would be able to stand here before you and have a chance to fix it, and that's what we're doing".
The Pharmaceutical Research and Manufacturers of America (PhRMA), a major lobbying group, is crying foul, saying the proposal will upend a competitive and innovative marketplace in the US, where patients get access to cutting-edge drugs faster than other developed countries.
"This is a pro-patient access model", he reiterated Friday.
It would represent a sea change for a country that has long resisted controls on drug prices. "This is setting the rates based upon worldwide standards", said Gerard Anderson, a health policy professor at Johns Hopkins University.
Dr. Kavita Patel, an internist at Johns Hopkins Hospital and senior fellow at the Brookings Institution, says the proposals could make a difference.
"This is the first time a United States administration appears to have taken a real step in their direction (how committed they are, we will see)", Bernstein analyst Ronny Gal said in a note Thursday ahead of the speech.
"I think this will be good in terms of the pricing of the drug - fantastic for that", Trump said.
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Physician groups such as the American Medical Association expressed cautious support, noting that Thursday's announcement lacked key details that would determine how well it ultimately serves their interests.
The HHS press release is available here. They talk about bringing down costs. "In other words, Americans pay more so other countries can pay less, very simple".
The speech was a a continuation of an effort set in motion in May, when the Trump administration laid out a 44-page drug-pricing blueprint, calling out middlemen in the pharmaceutical industry and "freeloading" by other countries that pay less than the United States for prescription drugs. "US prices were higher for most of the drugs included in the analysis, and USA prices were more likely to be the highest prices paid among the countries in our study".
The current Medicare Part B reimbursement system pays providers and hospitals based on the average sales price (ASP) of a Part B drug, plus a 6 percent add-on for storing the drug properly.
HHS estimates the new pricing index- which the agency says would apply to 50 percent of the country - would save Medicare $17.2 billion over five years.
The ratio of average payment based on ASP versus the average global target index would shift incrementally over a 5-year period in favor of the worldwide target, until in the program's fifth year payment would be targeted at 126% of the average global price, as opposed to the 180% that the U.S now pays compared to those same average prices. Medicare would reimburse the vendors at a rate comparable to the rate listed in the global price index.
In addition, physicians who want to get out of the "buy and bill" model could do so under the proposal. Azar said politics would have nothing to do with it.
If finalized as proposed, the IPI payment model would establish a system in which private vendors acquire drugs, distribute them to physicians and hospitals, and assume the billing responsibility. They may use group purchasing organizations to negotiate and secure lower prices.
The new plan will also fix a broken payment system, where doctors are reimbursed more if they prescribe a much more expensive drug, he said.
The pilot will be restricted to half of the country, with the specific locations still to be determined.
Analysts expect the proposal will spur a flood of comments from industry and other corners of the healthcare system, potentially delaying the administration's proposed timeline for implementation. HHS estimated that rollout could begin in late 2019 or early 2020.