Trump Budget Pitches Capping Seniors’ Out-of-Pocket Drug Costs, Cutting NIH Funding

The White House on Monday proposed capping out-of-pocket prescription drug expenses for seniors covered by Medicare, re-emphasizing Trump administration support for a concept endorsed both by pharmaceutical companies and congressional Democrats.

The proposal came within President Trump’s draft budget proposal — a document that also calls for a roughly $5.5 billion funding cut for the National Institutes of Health, despite the recent announcement of research and public health initiatives to end new HIV transmissions by 2030 and develop new treatments for childhood cancer.

The White House budget does not carry the weight of law and, in the past decade, has often gone largely ignored by Congress. While symbolic, the document is seen instead as a yearly opportunity for the administration to identify its spending priorities to Congress.

Lawmakers are almost certain to ignore many of the Trump administration’s proposals. The NIH enjoys wide bipartisan support and appropriators on Capitol Hill have increased its budget by roughly $9 billion, to $39 billion, in the past five years.

Other ideas, however, are more likely to gain traction — like the administration’s request for nearly $300 million to combat HIV/AIDS and lower new transmissions of the disease by 90 percent within a decade.

A cap on drug costs for seniors also appears increasingly popular in Washington. The administration first proposed it a year ago, and the idea carries the endorsement of health secretary Alex Azar, a top Democratic lawmaker, and the pharmaceutical industry. Trump also highlighted the proposal in his State of the Union address last month.

The concept, as laid out in Monday’s budget proposal, would limit spending on prescription drugs for seniors with Medicare coverage, providing financial certainty to both patients and drug manufacturers while leaving the government to pick up the tab for anything seniors spend on drugs past a certain threshold.

The budget document does not specify what that threshold would be, but it suggests the policy change would cost the federal government $14 billion. (Last year, the White House estimated a similar proposal would cost only $7.4 billion.)

Sen. Ron Wyden (Ore.), the top Democrat on the Senate Finance Committee, has proposed a bill that would cap annual drug costs at roughly $7,500 per Medicare beneficiary.

The budget also reiterates several previously outlined Trump administration drug-pricing priorities, including a proposal to allow some state Medicaid programs to craft their own more limited drug formularies and negotiate prices directly with manufacturers.

The White House included a similar concept in the previous year’s budget proposal, but rejected a similar scheme in Massachusetts, arguing it was illegal for the state to accept rebate payments from drugmakers without covering all available treatments.

The budget outlines steps to enhance the Food and Drug Administration’s authority to crack down on tactics drug makers use to prevent generic competition. It also emphasizes the White House’s desire to reform the 340B drug discount program, reducing payments to hospitals that provide little charity care and requiring that covered providers submit reports about their use of program savings.


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