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HHS Secretary Alex Azar responds to pharma sector’s criticism over Medicare pricing plan

Published on 29/10/18 at 09:57am

US Health and Human Services (HHS) Secretary Alex Azar responded to industry criticism on Friday after big pharma warned that Trump’s initiative, aimed at lowering the prices Medicare pays for drugs, would see the importation of ‘socialised’ price controls.

“Change is coming,” Azar said in response to critics. He went on to suggest that pharma firms “can be a part of the solution in bringing market-based, competitive ways of compensating for drugs and lowering patient out-of-pocket costs, or you can put your head in the sand and pretend change is not coming and you'll get whatever comes at you.”

The plan, which would use international prices as a benchmark for Medicare payments, will likely impact drug manufacturers with significant market share in the Medicare Part B programme. These include Regeneron Pharmaceuticals, Amgen, Roche, Johnson & Johnson and Bristol-Myers Squibb.

Spencer Perlam an analyst at Veda Partners commented in suggesting that "pharma and the [Trump] administration are on a collision course”.

Meanwhile Leerink Partners analyst Ana Gupte suggested that “while this current proposal is narrowly focused on Part B drug prices, we believe further changes beyond Part B…are still likely.”  She added that this could include the “possible elimination of drug manufacturer rebates and price transparency.”

Louis Goss

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