Free-market activists slam Trump’s international drug-pricing index

Free-market activists on Tuesday slammed an administration plan that would align the price of certain Medicare drugs with those in other countries, saying it would “import price controls” and undercut President Trump’s message on Democrats’ embrace of socialism.

FreedomWorks, a conservative pressure group, will join 75 activists in lobbying against the plan on Capitol Hill Wednesday.

They’ve got an ally in Rep. Andy Biggs, Arizona Republican who strenuously objects to the administration’s push for an International Pricing Index. As crafted, the index would allow the U.S. to set prices for doctor-administered drugs under Medicare Part B that are only slightly higher than what purchasers in Japan, Canada and major European nations pay.

“This seems to me like we’re importing drug controls,” Mr. Biggs said. “They all have price controls set by government. They don’t use the free-market system.”

The administration hasn’t backed down from the plan, despite criticism from Big Pharma and otherwise friendly Republicans and outside groups.

Health Secretary Alex Azar has said it’s unlikely that companies would walk away from the huge U.S. market, which would still be paying about 126 percent of foreign prices. Instead, foreign nations will have to either raise prices abroad or find space in their budgets to adjust to the new reality, the secretary says.

Yet Jason Pye, vice president for legislative affairs, argued the plan would be devastating for U.S. drugmakers, who insist their prices fund life-saving research and development of new cures.

“If drug companies can’t afford to create life-saving drugs, they simply won’t,” Mr. Pye said.

FreedomWorks has backed Mr. Trump’s agenda elsewhere, from tax cuts to criminal justice reform and Stephen Moore, the president’s ill-fated pick for the Federal Reserve board.

But it is frustrated with aspects of his health care agenda, from proposing new regulations to deal with “surprise” medical billing to cracking down on vaping products that cigarette smokers use to wean off more harmful nicotine sources.
“There are some disagreements on certain policy areas. They are big policy areas, I’ll concede that,” Mr. Pye said, downplaying the notion of a schism with the White House. “We want to work with the administration where we can.”
Mr. Pye pointed to the group’s support for GOP efforts to repeal and replace Obamacare, which failed, and for gutting the law’s “individual mandate” in the Republican tax overhaul, which succeeded.

He said the key point is that Mr. Trump cannot stand before Congress, in his State of the Union, and decry “socialist” ideas like a single-payer health system, only to move away from a staunchly free-market position on Medicare prices.
FreedomWorks said if anything, the pricing index evokes legislation from the Democratic side, including a bill by Sen. Bernard Sanders that would break up a drug company’s monopoly if it doesn’t charge Americans and other developed nations a similar price.

Mr. Biggs said instead, the administration and Congress should slash drug prices by speeding generics to market or barring brand-name companies from gaming the Byzantine patent system.

It’s unclear if his side will be able to rally enough Republicans to buck the president on his plan. GOP objectors may wait until the rule is closer to being finalized to voice concern, activists said.

“I think people, generally speaking, want to hold their fire until they absolutely have to start firing,” Mr. Pye said.

As crafted, Mr. Trump’s International Pricing Index would be phased in beginning in late 2019 or 2020 and affect half of the country.

Mr. Azar says the U.S. prices are already fixed under Part B, so it would be foolish not to lower prices, as foreign countries free-load off the U.S.

Mr. Pye said Washington should be focused on reforming unsustainable entitlements and moving the health care system further into free-market territory.

“The answer is not to run further toward socialism,” Mr. Pye said.

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