On Monday US President Trump announced his proposed $4.75trn annual budget for the forthcoming year.
Significantly for the BioPharma industry this included a $1.5trn cut to Medicaid and adds a $1.2trn for a “Market Based Health Care Grant” paid directly to states. Furthermore, the proposal includes a $845bn cut to Medicare over 10 years.
Significantly for the industry, President Trump’s proposal removes a cap on Medicaid manufacturer drug rebates. The purpose of this to “to ensure rebates reflect all price increases for a drug”.
The industry reaction to these announcements has been mixed. According to Jim Greenwood, CEO and President of the Biotechnology Innovation Organisation:
“We have serious concerns that elements of this proposal threaten to harm some of the nation’s most vulnerable patients, including seniors and low-income families. The budget would fundamentally upset the successful Medicare drug benefit that has provided American seniors with affordable prescription drug coverage while costing taxpayers less than originally expected. ”
“This includes a proposal to increase out of pocket costs for patients in the coverage gap who rely upon brand name drugs. We are also concerned that proposed changes to Medicaid could limit beneficiary access to needed cures and treatments.”
Regarding President Trump’s proposal to remove a cap on Medicaid manufacturer drug rebates, the Office of Health Economics (ICER and UK research group) recently said in a paper:
“Rebates have become an extremely contentious topic, praised by many as the best tool available to provide competitive leverage for payers seeking lower net prices, but reviled by others who view it as the chief sin in a system that punishes sick patients.”
Read more from the budget here.