US health secretary says his agency has the power to eliminate drug rebates to lower costs

The cost of health care, and prescription drugs specifically, is expected to be a major campaign issue ahead of November elections, in which Democrats are seeking to take control of the U.S. House of Representatives and Senate from Trump’s Republicans.

In May, Trump unveiled a “blueprint” comprising dozens of proposed policies to give the government greater leverage over drug prices, but did not support changes to give the federal government’s Medicare health plan for seniors direct negotiating power with drugmakers. Critics say that has spared the pharmaceutical industry any real challenge to its pricing practices.

Azar defended the administration’s actions, noting that more than a dozen leading drugmakers, including Pfizer, Merck and Celgene, had pledged to hold off on further price increases this year.

“They are seeing where this is going, they are seeing that we are ticking off the blueprint items one by one,” Azar said. “We are not dependent on the voluntary action of pharmaceutical companies. We are not counting on their goodwill or their altruism. … They’re just changing because they see that’s the future.”

Critics say the drug price pledges by major drugmakers are largely window dressing.

Since May, HHS has given Medicare Advantage health plans, which are administered by private-sector health insurers, new tools to lower prescription drug costs.

The agency’s Food and Drug Administration has unveiled a plan to boost the use of biosimilars, which are cheaper versions of expensive biotech medicines. Azar has directed the FDA to establish a working group to study how to import drugs safely from other countries if a drugmaker dramatically raises prices.

The actions have already sparked concerns. Last week, a leading group of rheumatologists met with Azar to discuss changes to Medicare Advantage that could force some patients to try a less effective, cheaper medication for a period of time before their health plan would cover a more expensive therapy.

HHS said Azar emphasized the agency’s interest in lowering drug prices but expressed openness to alleviating burdens that could be placed on physicians as a result of the new rule.

Azar said he spoke with Trump every few days, either in person or over the phone and that in every conversation, the president wanted to hear about progress on lowering prescription medicine costs.

“I have never once had a meeting or phone call with the president where we have not talked about drug pricing,” Azar said.

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