The paper blames high drug spending in the United States — where pharmaceutical products cost more than in any other developed country — on nations that have fixed drug prices and “free ride” off the innovation of companies that pay for drug research and development by raising their U.S. prices.
It proposes several changes to how Medicare and Medicaid pay for drugs and how the Food and Drug Administration approves and regulates them, saying the federal programs and agencies could create a more level playing field for drugmakers.
The paper lays out two overall goals to lower drug costs — reducing the prices Americans now pay for biopharmaceutical products and expanding incentives for drug companies’ innovation — but soundly rejects the idea of the government negotiating down prices, as many Democrats and Trump himself have suggested implementing in the Medicare program.
“Reducing drug prices that Americans pay means recognizing that many artificially high prices result from government policies that prevent, rather than foster, healthy price competition,” says the report, titled Reforming Pharmaceutical Pricing at Home and Abroad.
“Drug prices, for example, are sometimes artificially high due to government regulations that raise prices,” it continues.
On Thursday, Health and Human Services Secretary Alex Azar told a small group of reporters that the president is “firmly committed” to advancing policies to bring down drug prices. “I am now less than two weeks on the job and have been working a great deal, let’s just say, on these issues already. We do think drug prices are too high,” he said, according to Bloomberg News.