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Trump State of the Union includes call for reference pricing legislation


President Donald Trump in his State of the Union address Tuesday night called for support for his administration’s international reference price model for prescription drugs as he promised that lower healthcare costs are the “next major priority for me.”

The president also urged Congress to push greater transparency across the healthcare industry, declaring that the government ought to require manufacturers, insurers and hospitals “to disclose real prices to foster competition and bring costs down.” He did not outline any specific policy, despite expectations that he would call for legislation to end surprise medical billing practices.

On a separate issue, he told Congress he would ask lawmakers in his upcoming budget proposal to commit funds to eliminate HIV in the U.S. within the next decade.

Trump put significant heft behind the HHS’ proposed reference price model that would peg drug prices within Medicare Part B to the average price paid in similar countries, declaring it unacceptable that Americans see such higher drug prices than people in other countries.

“This is wrong, unfair and together we can stop it,” Trump said.

He asked Congress to pass legislation “that finally takes on the problem of global freeloading and delivers fairness and price transparency for American patients.”

Trump and HHS Secretary Alex Azar introduced the model as a proposed demonstration last October. Azar last month met with Republicans from the Senate Finance Committee to pitch the idea, which GOP lawmakers said they are considering. The secretary hasn’t yet met with Finance Committee Democrats but plans to, according to an aide.

In a speech that called for unity before devolving into a fiery defense of an immigration policy decried by Democrats, Trump also touched a partisan sore point on Obamacare.

“We eliminated the very unpopular Obamacare individual mandate penalty,” Trump said as he listed Republican-led accomplishments over the past two years. He also touted Right to Try, the law that gives terminally ill patients access to unapproved drugs.

He also said that 2018 saw the “single largest decline” in drug prices in the last 46 years due to his administration’s policies.

According to Associated Press analysis, there were 96 drug price hikes for every cut in the first half of 2018, but ultimately fewer and smaller increases than in previous years.

As he previewed his administration’s push to end AIDS and HIV infection in the U.S., Trump said recent progress has brought “a once-distant dream within reach.”

The policy reflects the people tasked with healthcare, said William Pierce, senior director of the firm APCO Worldwide.

Azar served as the general counsel at HHS when the President’s Emergency Plan for AIDS Relief (PEPFAR) was created and implemented. Tony Fauci, director of the National Institute of Allergy and Infectious Diseases for more than three decades, helped drive PEPFAR.

Robert Redfield, the director at the Centers for Disease Control and Prevention, developed and ran HIV/AIDS programs in Baltimore and Joe Grogan, who is now head of the White House Domestic Policy Council, worked on HIV/AIDS policy in HHS under the President George W. Bush administration.

Taking on the abortion debate, Trump also asked for legislation to ban late-term abortions—an ask that is unlikely to go anywhere. He made the call in the wake of roll-backs of abortion regulations in Virginia and New York that have galvanized anti-abortion advocates.

After advocates jumped on Virginia Gov. Ralph Northam (D) for his defense of his state’s proposal, Sen. Ben Sasse (R-Neb.) pushed for a unanimous consent vote in the upper chamber to require care for infants who survive abortion or attempted abortion.

Senate Finance Committee Chair Chuck Grassley (R-Iowa) welcomed the call to action on drug prices with a warning that Congress and the administration “have their work cut out.”

“President Trump’s call for greater transparency in healthcare should be a no-brainer,” Grassley said. “I expect deep-pocketed interests to oppose anything and everything to protect the status quo. But the moment is ripe for action and Americans expect us to work together to get the job done.”

One House Democrat said while the healthcare notes were a welcome counterpoint to some of the other points in the speech, they were vague.

“I thought that was a good moment in the speech, I thought that to the extent that he follows through we maybe have an opportunity to make a deal,” said Rep. Raja Krishnamoorthi (D-Ill.), who chairs the health subcommittee for the House oversight panel that is scrutinizing drug prices. “But again, I didn’t hear a lot of specifics. I wish he would have talked about negotiation under Medicare Part D, I wish he would have talked about reducing obstacles to generics, I wish he would have talked about transparency to pricing.”

The president’s push for cross-industry transparency felt more like rhetoric than a call to action, the congressman added.