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White House regroups on drug prices

President Trump and HHS Secretary Alex Azar. Photo: Chip Somodevilla/Getty Images

The Trump administration is looking for Congress to implement major changes to how the federal government pays for drugs, following a week of setbacks to its drug pricing agenda.

Yes, but: The major exception to this is the administration's proposal to tie what Medicare pays for some drugs to rates in other countries.

  • President Trump also recently teased a similar executive order that would create a "favored nations clause," under which the U.S. would pay no more for a drug than the lowest price paid by another country.

Driving the news: The White House said late Wednesday night that it'd decided to kill its proposal to eliminate back-end rebates in Medicare Part D and Medicaid.

  • And on Monday, a judge halted the administration's requirement that drug ads on TV must include list prices, one of the only pieces of its agenda enacted so far.

What they're saying: A senior administration official said yesterday that the decision to walk away from the rebate rule was based partially on "lurching bipartisan progress toward something on the Hill," and a desire to not upset a pending deal.

  • But when it comes to Medicare Part D, "what we really want to do is modernize the entire benefit," including increasing payers' exposure to high drug costs.

There were also concerns about premiums rising under the rebate rule. The president "doesn’t want any risk that seniors’ premiums could go up," HHS Secretary Alex Azar told reporters yesterday, per Bloomberg.

  • Azar pointed to Congress' efforts on rebate reform and to give HHS the authority to require prices on TV ads.

One more thing: The administration has also expressed interest in a controversial measure that would limit how much drug prices can rise in Part D — an idea distasteful to both pharma and free-market Republicans.

Go deeper: Axios' Deep Dive on drug prices