Trump Signs New Laws Aimed at Drug Costs and Battles Democrats on Medicare

President Trump signed bipartisan legislation on Wednesday that would free pharmacists to tell consumers when they could actually save money by paying the full cash price for prescription drugs rather than using health insurance with large co-payments, deductibles and other out-of-pocket costs.

The legislation on gag clauses has been praised by lawmakers in both parties, but the signing was nearly eclipsed on Wednesday by a separate health care furor: Mr. Trump asserted in an essay in USA Today that Democrats supporting “Medicare for All” would wreck the program for older Americans, infuriating Democrats who said he was lying to millions of Americans.

“Democrats would gut Medicare with their planned government takeover of American health care,” Mr. Trump said, and he assailed Democrats as “radical socialists.”

The back-and-forth over health care showed how prominent the issue has become in the midterm election campaigns. As the parties were coming together on prescription drug costs and fighting over Medicare, the Senate deadlocked on Wednesday over a Democratic proposal to block the expansion of cheap “short term” health insurance policies that do not have to cover maternity care or pre-existing conditions, a top priority of Mr. Trump’s.

Democrats, hoping to regain control of the Senate, had pushed for the vote to put Republicans on the record as opposing protections for people with pre-existing conditions.

“The Trump administration has expanded junk insurance plans,” said Senator Tammy Baldwin, Democrat of Wisconsin, who led the effort. “These plans are cheap for a reason. They do not have to provide essential health benefits like hospitalization, prescription drugs and maternity care.”

The agreement over ending the gag clauses showed how Congress, despite all the partisan rancor, can still get things done. Pharmacists around the country say they have often been forbidden to share information on drug pricing with customers. The restrictions, they say, have been imposed by companies that manage drug benefits for insurers and employers.

The legislation will “completely end these unjust gag clauses once and for all,” Mr. Trump said.

He signed two bills. One, introduced by Senator Susan Collins, Republican of Maine, bans gag clauses in commercial health insurance, including coverage offered by employers and plans bought by individuals and families on their own.

The other bill, introduced by Senator Debbie Stabenow, Democrat of Michigan, applies to outpatient drug coverage in Medicare, whether provided by the traditional fee-for-service program or by private Medicare Advantage plans.

“Insurance is intended to save consumers money,” Ms. Collins said. “Gag clauses do the opposite. They prevent pharmacists from telling patients how to pay the lowest possible price for their prescription drugs.”

Lawmakers were not so sanguine about the president’s attack on Democrats over Medicare. Senator Bernie Sanders of Vermont, the author of the Medicare for All plan supported by at least 15 Democratic senators and more than 100 House Democrats, said Mr. Trump’s broadside was full of falsehoods.

“Our proposal wouldn’t cut benefits for seniors,” Mr. Sanders said. “In fact, we expand benefits. Millions of seniors today cannot afford the dental care, vision care or hearing aids they desperately need. Our proposal covers them. In addition, Medicare for All would eliminate deductibles and co-pays for seniors and significantly lower the cost of prescription drugs.”

Mr. Trump and members of Congress from both parties have bewailed the high cost of many drugs. But aside from the bills signed Wednesday, Congress has not done much to address the issue this year.

Steven F. Moore, whose family owns Condo Pharmacy in Plattsburgh, N.Y., said the new federal laws would be “a big help.” The restrictions on pharmacists’ ability to discuss prices with patients are “incredibly frustrating,” he said.

The clauses force pharmacists to remain silent as, for example, consumers pay $125 under an insurance plan for an influenza drug that would have cost $100 if purchased with cash.

Representative Earl L. Carter, Republican of Georgia, also hailed approval of the legislation.

“As a pharmacist for more than 30 years, there were many times when I was prevented from telling my patients that there was a cheaper option because of a gag clause,” said Mr. Carter, known as Buddy.

Lobbyists for pharmacy benefit managers did not fight the legislation and suggested that gag clauses were dying out.

Mark Merritt, the president and chief executive of the Pharmaceutical Care Management Association, which represents drug benefit managers, said: “We don’t condone the use of gag clauses. It has occurred on rare occasions, but it’s an outlier practice that we oppose.”

Pharmacists tell a different story. They say gag clauses have been common for years. Hugh Chancy, a pharmacist who owns five community drugstores in southern Georgia, said his company had been reprimanded by a pharmacy benefit manager for telling customers when it would be cheaper to pay for medicines without using insurance.

The legislation signed Wednesday also includes a provision to combat agreements between drug makers that stifle competition by delaying the marketing of lower-cost copycat versions of expensive biotechnology medicines. Such biologic medicines account for a rapidly growing share of drug spending.

Under the new law, manufacturers of the original product and the copy, known as a biosimilar, will have to report such agreements to the Federal Trade Commission, which can challenge them as violations of antitrust laws. The agreements are known as pay-for-delay deals because the branded drug company pays a potential competitor to delay entering the market.

“These agreements are great deals for the drug companies, but bad deals for consumers,” said Representative John Sarbanes, Democrat of Maryland. Until now, he said, officials had “no way of knowing how many of these back-room deals occur between manufacturers of biologic and biosimilar drugs — new, cutting-edge drugs that are often extremely expensive.”

On a separate issue, the Senate allowed the Trump administration on Wednesday to move ahead with its plan to promote the sale of “short term” health insurance policies that do not have to provide all the benefits required by the Affordable Care Act.

Under a rule that took effect this month, it will be much easier for insurers to issue and renew such plans. The maximum duration, including any extensions, would be 36 months.

An attempt by Democrats to overturn the rule failed in the Senate on a tie vote of 50 to 50. Ms. Collins was the only Republican who voted for the resolution of disapproval.

Mr. Trump said such short-term policies would be available for “just a fraction of the cost of Obamacare — much less money.”

 

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