Trump unveils plan to slash drug costs tied to what’s paid abroad

The pharmaceutical industry and many conservative groups vehemently oppose the most favored nations plan over the way it would effectively import foreign governments’ price controls. An alternative proposed by drug lobby PhRMA last month would lower costs more modestly in Medicare Part B and Part D by giving a “market based discount” on the often pricey physician-administered drugs and installing a cap on patient cost-sharing for pharmacy counter medicines.

Stephen Ubl, president and CEO of PhRMA, called the Trump order a “reckless attack” on companies working on coronavirus treatments, adding it would “will give foreign governments a say in how America provides access to treatments” and threaten U.S. innovation.

Michelle McMurry-Heath, president and CEO of the Biotechnology Innovation Organization, said her trade group “will use every tool available — including legal action if necessary — to fight this risky foreign price control scheme.”

Trump in July gave the drug industry a one-month deadline to come up with an alternative plan. But pharmaceutical companies refused to meet with the president and the deadline passed.

An industry alternative delivered to the White House in late August would have saved the government and seniors significantly less money but could also have been implemented before the election and help Trump deliver on a signature promise in his 2016 campaign.

But talks between PhRMA and the White House broke down last week, according to two lobbyists.

Susannah Luthi and Dan Diamond contributed to this report.