United States: Trending Video: Drug Pricing Initiatives During The Trump Presidency (Video)

Tom Bulleit, Ropes & Gray health care partner, discusses the Trump Administration's latest drug pricing initiatives.


I'm Tom Bulleit, a health care partner based in Ropes & Gray's Washington, D.C. office. In this video, I'll discuss drug pricing initiatives during the Trump presidency.

The Administration's 2017 health policy efforts were devoted mostly to the ultimately unsuccessful effort to repeal the Affordable Care Act; but in 2018, the Administration stepped up its game with the Rose Garden presentation of their "American Patients First" strategy, called the Blueprint, to curb prescription drug prices. The Blueprint set four priorities that have spurred various Administration initiatives over the past year: improve competition, improve negotiation with drugmakers, incentivize lower list prices, and reduce out of pocket costs. The FY 2020 budget that the Administration released on Monday March 11 also contains several of these ideas.

Improve competition

Turning first to promoting competition, FDA has taken some steps—issuing lists of drugs that could be subject to generic competition, and issuing guidance to make it easier for generic makers to force brand makers to provide the sample needed to reverse engineer the generic. But FDA's actions likely will have only modest effects on drug prices. The FDA approval process is only one aspect of whether a potential manufacturer of generics or biosimilars would view market entry as profitable. More radical steps, such as finding a way to penalize drug companies for so-called pay-for-delay arrangements, are contained in bills in Congress and in the President's budget, but it's doubtful that there is sufficient bipartisan consensus to enact the stronger measures.

Improve negotiation with drugmakers

While the Blueprint did not include direct federal negotiation with drugmakers, the budget proposes a Medicaid demonstration project that would allow a closed drug formulary and direct negotiation on prices by Medicaid plans. But as with the Administration's other stronger measures, a change this dramatic has little chance of becoming law anytime soon. The biggest negotiation idea is a proposed rule that for half of Medicare Part B drug spending, would replace the current physician buy-and-bill system, which gives physicians a statutory markup on drugs they administer in their offices, with a new vendor-based system. Vendors would buy and bill for the product and doctors would get paid only a fixed fee for administration. Importantly, CMS's reimbursement of the vendors would be based on the average price of the drug in select countries. The drug industry already has support from patient and provider groups in opposition, and some Republicans in particular have already objected on grounds of "socialized medicine" and "foreign price controls." It's also not clear how it would reduce prices: why the new vendors would have any more negotiating power than today's PBMs. And of course, the proposal will invite a legal challenge as the breadth of such a demonstration project could exceed the scope of CMS's authority.

Incentivize lower list prices

The Administration's early tactics in encouraging lower list prices are best described as price shaming: calling out publicly the drug companies that raise their prices. The President prevailed on some companies to avoid any mid-year increases in 2018, but most of those companies raised their prices at the beginning of 2019. The Administration's also proposed a regulation to require direct to consumer ads to show the list price of Medicare and Medicaid covered drugs, and Johnson & Johnson recently announced that it would begin to do so. But again, there's little indication that this kind of activity will lead to lower prices.

Reduce out of pocket costs

The Administration has touted with much fanfare its newly proposed rule that would eliminate anti-kickback safe harbor protection for rebates to health plans and their PBMs, and creating new safe harbors for paying PBMs on a fixed fee basis, and protecting rebates that are passed through to the consumer at point of sale. Although this rule would be a major disruption to the way business is done in the drug supply chain, it's hard to see how it would reduce list prices. What it could do is transfer the benefit of any price reductions from the PBM to the pharmacy and the consumer. That would be a step towards the Blueprint's fourth priority, reducing out of pocket costs. But outlawing percentage-based rebates to PBMs will be challenged in court as inconsistent with the anti-kickback law's statutory exception for discounts. 

In sum, the Administration is creating a new environment where there will be lots of work for trade and professional associations, lobbyists and lawyers. Consumers might see some modest relief on point-of-sale cost-sharing, though potentially at the expense of higher premiums. But substantially lowering drug prices? I wouldn't hold my breath.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions