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Trump blasts drugmakers, middlemen for high U.S. drug prices

Reuters  |  WASHINGTON 

By Yasmeen Abutaleb

WASHINGTON (Reuters) - U.S. on Friday blasted drugmakers and "middlemen" for making prescription unaffordable for Americans, but stocks rose as experts said the administration avoided taking aggressive and direct measures to cut drug prices.

Trump said his administration would take aim at the "middlemen" in the drug industry who became "very very rich," an apparent reference to insurers and benefit managers. He also said the is making an "absolute fortune" at the expense of American taxpayers.

"Everyone involved in the broken - the drugmakers, companies, distributors, benefit managers, and many others -- contribute to the problem," Trump said.

Shares of the in each of those sectors rose after the speech, with the sector <.SPXHC>, a broad gauge of large healthcare stocks, up 1.4 percent.

Trump also placed blame on foreign governments, which negotiate lower drug prices than in the U.S., saying they "extort" unreasonably low prices from U.S. drugmakers.

Trump was speaking as his deputies released a series of proposals to address high drug costs.

The Department of and Human Services released what it called a blueprint titled "American Patients First" with details of its plan. It said the administration's immediate actions would include allowing commercial plans that administer Part D benefits for seniors more power to negotiate prices with drugmakers.

The would evaluate requiring drugmakers to include the list prices they set on medicines in their advertising. Drugmakers argue that list prices do not reflect actual cost with discounts and rebates.

Some of the administration's longer-term priorities include restricting use of rebates, creating incentives for drugmakers to lower list prices in Medicare, and investigating tools to address foreign government practices that it said could be harming innovation and driving up U.S. prices.

said Trump's plan sounded like rhetoric rather than substantive change for an industry where prices rise substantially more than inflation each year.

"There's not a big proposal here that is going to make a huge difference. There are a bunch of smaller technical changes," said Sam Richardson, at

Regarding forcing other countries to pay more for drugs, Richardson said: "We don't really have the policy levers to get that to happen."

Health and said during a briefing that many of the actions the government was considering would not require the U.S. Congress, but could take place through action within months. He said it would take years to restructure the U.S. drug

were volatile during Trump's speech, with shares of companies involved in the pharmaceutical supply chain, such as Holding Co and Corp , hitting session lows. But those stocks quickly reversed course, with shares up 2.4 percent and CVS up 3 percent.

(Reporting by in Washington, additional reporting by Caroline Humer, and in New York; editing by Bill Berkrot)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sat, May 12 2018. 01:27 IST