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The White House eliminates the key rule on the price of drugs to eliminate hidden discounts

Health and Social Services Secretary Alex Azar and President Donald Trump talk about kidney health. (Alex Brandon / AP)

The Trump administration has selected one of its key proposals to reduce drug prices, which would have eliminated discounts to Medicare intermediaries, which President Trump's senior health official had touted as one of his most important changes to reduce drug costs for consumers.

The rule is the second major effort in drug prices to collapse this week, complicating the administration's efforts to make prescription cost reduction a key issue in the 2020 presidential campaign.

Health and Social Services Secretary Alex Azar and key White House political advisers disagreed on the rationale for the rule, which has been a source of tension between the two camps. Azar had proposed the rule in January as a central element of the administration's efforts to lower the price of drugs, and had proposed to implement the change next year. But White House political advisors have inherited the estimated price of the rule of nearly $ 180 billion over a decade and wondered if it would be effective.

"Based on careful analysis and thorough review, the president has decided to remove the rule on rebates," White House spokesman Judd Deere said in a statement. published Thursday. "The Trump administration is encouraged by the continuation of bipartite discussions on legislation aimed at reducing the exorbitant costs of drugs imposed on the American people, and President Trump will consider using any tool to ensure that the costs of prescription drugs will continue to decline. "

Estimates also showed that the rule would increase Medicare premiums. Azar told reporters on Thursday that Trump did not want to take the risk of increasing the costs of the elderly by an administrative rule and that the president had made the decision to drop it.

"At the end of the day, while we support the idea of ‚Äč‚Äčeliminating discounts, we will not expose seniors to the risk of increasing their premiums," said Azar. "We will continue to see that the discount days are over. We totally changed the debate on discounts. "

Drug manufacturers were in favor of the rule, but drug benefit managers, those who administer drugs for employers and health plans, and negotiate rebates with manufacturers, strongly oppose it.

"Only drug manufacturers have the power to set prices for drugs. We believe lowering drug costs means adopting policies that promote greater competition, "said J.C. Scott, President and CEO of the Pharmaceutical Care Management Association. The group represents pharmaceutical benefit managers.

Earlier this week, a federal judge blocked a rule that would have required drug companies to include the advertised prices of their drugs in television commercials, arguing that HHS had exceeded its authority in implementing the rule and needed of congressional approval to do so.

Trump has increased pressure on his advisers to gain price on drugs he can boast about the election campaign. However, internal conflicts within the administration on how best to fulfill the president's wishes have threatened some of these efforts.

"Secretary Azar is fighting alongside President Trump to reduce prescription drug costs and protect American seniors," said HHS spokeswoman Caitlin Oakley in a statement released on Thursday. "President Trump and Secretary Azar are taking bold steps to end the free foreign riding, examine how to safely import prescription drugs at a lower cost, give patients meaningful transparency, and the list goes on."

HHS also proposed a rule, under consideration at the White House, that would base the price of some Medicare drugs on the average price paid by other countries whose drug costs are much cheaper.

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