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President Trump speaks at HHS. Photo: Chip Somodevilla/Getty Images

The Trump administration’s latest plan to reduce U.S. drug prices is to import some of the price controls imposed by Europe’s single-payer health care systems.

Driving the news: The plan that HHS outlined yesterday would apply to drugs administered by a doctor, not the kind you pick up at a pharmacy.

  • Today, Medicare pays a fixed rate for those drugs, based on their average price within the U.S.
  • Under the new proposal, Medicare would still pay a fixed rate. But it would be tied to the prices for the same drugs in other countries — mostly countries in Europe, most of which have single-payer health care systems.
  • For the drugs that would be affected here, Medicare currently pays almost twice as much as other countries, according to HHS.

“We’re setting a price right now. We’re just not setting a very good price,” Azar told reporters, in response to questions about whether the new proposal amounts to government price setting.

What they’re saying: The Obama administration proposed a similar policy in 2016, and industry groups killed it. There’s pretty decent chance that could happen here, too.

  • “The administration is imposing foreign price controls from countries with socialized health care systems that deny their citizens access and discourage innovation,” PhRMA president Stephen Ubl said in a statement.
  • Cancer treatment relies heavily on the physician-administered drugs whose prices would fall under this plan, and cancer doctors led the charge against Obama’s version. The Community Oncology Alliance said Trump’s proposal "will interfere with the quality, accuracy, and timeliness of treatment."

There is, obviously, an argument that government price setting works. It’s just not usually an argument Republican administrations make.

  • But President Trump’s public comments on drug prices return frequently to the theme that Europe is taking advantage of the U.S., and we should be paying what they’re paying.

Between the lines: There's at least some conservative competitive element, as the new plan aims to weaken Europe's price controls before piggybacking off them.

  • This is a subject of active debate in the health care world, but the economists I spoke to yesterday said the administration is probably correct to say that tying U.S. prices to European prices would drive up European prices, at least a little.

How it works: The idea is that, if drugmakers can no longer count on high U.S. prices to subsidize lower reimbursements abroad, they'll simply have to strike more favorable deals with European countries.

  • Sure, a single public payer has a lot of leverage, the argument goes, but will the U.K. really walk away from providing its citizens a promising cancer treatment?

The plan also calls for a new purchasing arrangement for physician-administered drugs. Currently, doctors have to buy the drugs, store them, and hope they can use them and bill Medicare. HHS' proposal would have third-party vendors buy the drugs, then sell them to doctors.

  • Azar and other HHS officials mentioned this arrangement a couple of times yesterday, as a way the new plan still tries to foster market competition.
  • But the experts I spoke to said that if you're already starting from a fixed slightly-more-than-Europe price, it's hard to see how much more of a discount those vendors could realistically produce.

“It feels a little bit like, ‘If we mention competition in this document, no one will pay attention to the fact that we’re importing European price controls,'” Garthwaite said.

Go deeper

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Axios-Ipsos poll: America looks for the exits after a year of COVID

Data: Axios/Ipsos poll; Chart: Danielle Alberti/Axios

A year after the coronavirus abruptly shut down much of the country, Americans are watching for a clear signal of when the pandemic will be over — and most won't be ready to ditch the masks and social distancing until they get it, according to the latest installment of the Axios/Ipsos Coronavirus Index.

The big picture: The poll found that more Americans are expecting the outbreak to be over sooner rather than later, as vaccinations ramp up throughout the country — but that very few are ready to end the precautions that have upended their lives.

Caitlin Owens, author of Vitals
51 mins ago - Health

Many vulnerable Americans have received the coronavirus vaccine

Data: CDC, U.S. Census Bureau; Chart: Andrew Witherspoon/Axios

More than two-thirds of Americans 75 and older have received at least one dose of the coronavirus vaccine, as have more than half of those 65-74, per CDC data.

Why it matters: Any future surge in cases almost certainly wouldn't be as deadly as previous waves, because older people are the most likely to die from the virus.

3 hours ago - World

Report: "Clear evidence" China is committing genocide against Uyghurs

The scene in 2019 of a site believed to be a re-education camp where mostly Muslim ethnic minorities are detained, north of Kashgar in China's northwestern Xinjiang region. Photo: Greg Baker/AFP via Getty Images

Chinese authorities have breached "each and every act prohibited" under the UN Genocide Convention over the treatment of Uyghurs and other Muslim minorities in China's Xinjiang province, an independent report published Tuesday alleges.

Why it matters: D.C. think-tank the Newlines Institute for Strategy and Policy, which released the report, said in a statement the conclusions by dozens of experts in war crimes, human rights and international law are "clear and convincing": The ruling Chinese Communist Party bears responsibility.