Trump May Look to Advance International Pricing Index

January 30, 2020

Game On: Groups Launch Competing Drug Pricing Ad Campaigns 

With prospects dim, at least in the short-term, for passage of comprehensive drug pricing legislation in Congress, some Washington observers suggest President Trump is eager to push for regulatory changes in an effort to capture the high ground on lowering prescription drug costs ahead of the 2020 elections. These regulatory changes include issuing a proposed rule to tie Medicare drug prices to prices paid abroad, otherwise known as an International Pricing Index (IPI) model.  Earlier this week, Politico reported on White House efforts to issue a proposal in time for the President’s February 4 State of the Union Address. Meanwhile, in a letter to HHS Secretary Alex Azar, the Americans for Tax Reform, along with a coalition of 52 organizations, urged the administration to withdraw, not finalize, the proposed International Pricing Index.

While a proposed drug importation rule was issued in December, an IPI proposed rule has been under review for more than a year. The concept first surfaced as part of an Advance Notice of Proposed Rulemaking (ANPR) in October of 2018. The ANPR sought feedback in shaping a proposed rule that would establish an IPI demonstration project aimed at reducing the price of Medicare Part B drugs — drugs administered in physician offices and hospital outpatient settings. Sometimes agencies in the preliminary stages of rulemaking will publish an ANPR to collect more information before drafting a proposed rule. Now, as President Trump hopes to deliver on his pledge to cut drug costs, the IPI plan could move more quickly and be expanded to cover Medicare Part D drugs, in addition to Part B drugs.

BioUtah submitted comments in response to the ANPR stating that “the model, if advanced and ultimately implemented through further rulemaking, would impose foreign price controls on the U.S. drug market, put the brakes on innovation, and threaten access to critical cancer drugs and other therapies”. BioUtah, along with its national partners, BIO and PhRMA, have urged the administration to withdraw the rule completely. Pegging drug prices to countries with socialized health systems could limit the choice of drugs available to U.S. patients. A BIO issue brief notes that nearly 90% of all new medicines launched since 2011 are available in the U.S., compared to just 50% in France, 48% in Switzerland, and 46% in Canada. 

Under the House-passed Democrat drug pricing bill, H.R. 3, the Lower Drug Costs Now Act, Medicare negotiated drug prices could not exceed an international reference price. Both the Congressional Budget Office and the President’s Council of Economic Advisor’s have revealed that H.R. 3 would harm innovation, bringing fewer new treatments to market.  

Competing Ad Campaigns

Polls show that the cost of drugs is high on the list of voter concerns. Democrats and Republicans both say they have solutions, but the policy divide over how best to tackle the problem is significant.

Not surprisingly, advocacy groups are starting to line up for and against the major drug pricing proposals in Congress. The conservative-leaning  American Action Network has launched a media campaign to push for the Republican alternative drug pricing measure, H.R. 19, the Lower Costs, More Cures Act. Meanwhile Patients over Pharma, a progressive group, has launched ads attacking the Trump Administration and Republicans for opposing H.R. 3, Speaker Pelosi’s drug pricing plan. As reported in the The Hill, the Democrat Congressional Campaign Committee has also weighed in with drug pricing ads against Republicans in swing districts.