It concludes that the higher U.S. prices means Medicare pays almost twice as much as the program would pay for the same or similar drugs in other countries. "Each country is making its own decisions around pricing and reimbursement for a drug based on their own budgets and mechanisms and policies and so on", he said in a phone interview.
Trying to cut high drug costs, the prices paid by Medicare for certain prescription drugs would be based on those in other advanced industrial nations, according to a proposal announced Thursday by the Trump administration.
But the administration has in fact been supportive or actively engaged in efforts that could affect people with pre-existing conditions - from repeated attempts to roll back Obamacare to efforts at the agency level to loosen regulations that provide ironclad protections for consumers who are or have been sick.
In some cases, European patients have to pay the difference between the government's reference price and what the company charges for a drug, said University of York's Moreno-Serra.
Health Secretary Alex Azar said President Trump's bid to tie what the USA government pays for certain Medicare drugs to what other nations pay won't cripple innovation or access to vital treatments, even if the plan is one of Big Pharma's "ultimate nightmares".
A number of health care-related announcements have been made by the White House ahead of next month's midterm elections.More news: Man arrested over United States mail bombings
In advance of Trump's speech, HHS released a report that found US prices for the top drugs administered in doctors' offices are almost twice as high as in foreign countries.
The report compares the price paid by Medicare for 27 prescription drugs with the average price paid for the same drugs by countries with similar economic conditions.
"Medicare could achieve significant savings if prices in the US were similar to those of other large market based economies", the report concludes.
The Trump administration released a 44-page blueprint in May that laid out his vision for increasing competition and changing the incentives for the industry. Another recent Trump policy appears more substantive: He signed a bill that bans gag clauses for pharmacists, which prohibit them from telling patients that a less expensive version of the drug is available.
And drug companies are not going to "walk away" from the world's largest payer for prescription drugs, Azar argued.
"The reality is he could very easily not take this on and do what other administrations have done and let the prices keep rising". "There was only a single case in which the United States was paying lower than the worldwide average". "We're fixing it. That's called real-life experience, I guess", Trump added. The IPI model instead would engage private sector vendors to offer certain drugs to participating physicians and hospitals at a rate based on a Target Price derived from an global price index. Those drugs that stand to lose the most revenue include Rituxan from Genentech and Biogen, Amgen's Neulasta, Regeneron's Eylea and Genentech's Lucentis.
CMS projected that the IPI payment model would result in approximately 30 percent savings in total spending on the selected Part B drugs.More news: Air quality severe in most of Delhi, Faridabad 25 times polluted
Already, however, there is skepticism about how much this will impact the drug industry.
The HHS report "provides troubling insight into how the current global drug pricing system has put America in last place,"Azar tweeted". Medicare pays directly for them under its "Part B" coverage for outpatient care.
While Part B spending on drugs has doubled since 2006, Part D spending on drugs has risen much more slowly.
Another concern: The federal government's negotiating power is more limited when it comes to Part B drugs because Medicare can not exclude medications. The report notes Part B is not subject to restrictions on the drugs that are covered, meaning there is little incentive to tamp down costs. In the United Kingdom, for example, a drug company will go to the National Institute for Health and Care Excellence, or NICE, offering confidential discounts or rebates off of a drug's list price. In a March Kaiser Family Foundation poll, eight in 10 respondents said drug costs are unreasonable and 92 percent said passing legislation to bring down the cost of prescription drugs should be a top or important priority.
The president in May also claimed drug companies would be announcing "massive" voluntary price cuts. If a patient needs a specific drug, they need a specific drug; knowing the drug's price changes nothing about their material circumstance.
This article was written by Felicia Sonmez and Paige Winfield Cunningham, reporters for The Washington Post.More news: Prince Harry and Meghan Markle's plane forced to abort landing in Sydney