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Democrats target high drug prices as White House huddles on failing strategy

As a group of Democrats were teeing up legislation intended to lower Americans' costs for prescription medicines, top Trump administration officials were huddled at the White House this week strategizing over how to get drugmakers to bring down their prices a feat it so far has largely failed to achieve.

Sen. Bernie Sanders, I-Vt., and Democratic Reps. Elijah Cummings of Maryland, Ro Khanna of California, Peter Welch of Vermont and Joe Neguse of Colorado plan to unveil a legislative package on Jan. 10 that takes aim at high prescription drug prices.

Over the past few years, the lawmakers have individually or with other colleagues introduced separate measures intended to reduce the amount of money Americans pay for their medicines, though the bills have not made it very far in getting through the legislative process.

In November 2018, Sanders and Khanna introduced legislation that would allow the U.S. government to control Americans' costs of medicines by employing an international price indexing system — a measure somewhat similar to an idea being mulled over by the Trump administration.

In 2017, Sanders proposed legislation to permit Americans to import prescription drugs from Canada and other industrialized nations as a way to lower their costs — a longtime pursuit for the Vermont senator. Cummings introduced a companion bill in the House.

The Maryland Democrat also joined Welch in co-authoring a bill in 2017 intended to let the Medicare Part D program negotiate drug prices directly with the U.S. government rather than using middlemen — pharmacy benefit managers, or PBMs.

This week, Welch and some of his Democratic colleagues were joined by Rep. Francis Rooney, a Republican from Florida, in introducing a similar bill in the House.

"It is an unconscionable abuse to the American people that pharma does not compete for drugs provided under Medicare Part D," Rooney said in a Jan. 8 statement.

Sen. Amy Klobuchar, D-Minn., is sponsoring a companion bill in the Senate — the Empowering Medicare Seniors to Negotiate Drug Prices Act.

The lawmakers noted that before entering the White House, President Donald Trump had vowed on the 2016 campaign trail to back efforts to let Medicare negotiate prices directly with biopharmaceutical manufacturers on drugs covered by Part D plans.

'All options are on the table'

Meanwhile, Health and Human Services Secretary Alex Azar confirmed he and other officials met on Jan. 8 with Trump at the White House to discuss the administration's efforts to implement its May 2018 strategic plan to lower prices.

After drugmakers increased their U.S. prices on hundreds of their products at the start of the new year, Trump criticized them on Twitter, saying last week the companies were "not living up to their commitments" nor "being fair" to American consumers and the nation.

Azar had insisted the price increases so far in 2019 have been "smaller and fewer" than those in 2018.

But if drugmakers do not bring prices down further, "we will roll out more regulatory and legislative proposals," the HHS secretary said during a Jan. 9 appearance on Fox's Varney & Co.

"All options are on the table," he said, later repeating those remarks on Twitter.

Azar said drugmakers have confessed they keep their list prices high so they can funnel "kickbacks" to PBMs so they will keep the biopharmaceutical manufacturer's medicine in a preferred status on the payer's formulary — a list of covered products.

"For those listening in the pharmaceutical industry: The list price increases must stop. Prices must start coming down," Azar tweeted.

"And for those who continue to repeat that list prices don't matter, let's remember: Anyone who hasn't spent through their deductible or has coinsurance is paying all or a percentage of the list price of the drugs they need. List prices matter," he added.

Azar gave few details about his meeting with Trump.

The White House and HHS declined to say whether Centers for Medicare and Medicaid Services Administrator Seema Verma and the administration's drug pricing czar John O'Brien were at the Jan. 8 meeting.

"This was an internal administration meeting to look at the progress being made to bring down drug prices," White House spokesman Judd Deere told S&P Global Market Intelligence. "The president has made it a commitment to bring down the cost for the benefit of all Americans. Moving forward, the president has directed Secretary Azar to look at all options — regulatory and legislative — to enact real change and stop the abusive behavior by drug companies."

Lilly first to implement list price principles

One way to lower drug costs is to force manufacturers to include the list prices of their medicines in television advertisements aimed at consumers, the administration said in October 2018 in unveiling a proposal aimed at putting such a requirement in place.

The drug industry tried to get in front of HHS' proposal with its own voluntary plan, though drugmakers are not yet willing to directly disclose their list prices in ads and only pledged last fall to point consumers to websites and other resources where they may find publicly available information.

The Pharmaceutical Research and Manufacturers of America said all of its current members had signed on to the new list price principles, which go into effect April 15.

On Jan. 8, Azar's former employer, Eli Lilly and Co., became the first company to implement those principles and include in drug ads a toll-free phone number and website where consumers can learn about the list price, average out-of-pocket costs and patient assistance programs.

Currently, the site only notes the list price for one drug: Trulicity, a type 2 diabetes medicine, which is listed at $730.20 per month.

"By end of February, we will do the same for the other medicines we advertise on TV. And in the months following, we will post this information for our other Lilly medicines, whether we advertise about them or not," the company's chairman and CEO, Dave Ricks, wrote in a Jan. 8 blog.