President Trump, Drug Prices, & Executive Orders – Here's What You Need to Know
With no new laws on the horizon to curb biopharmaceutical pricing, U.S. President Trump is trying some of his own changes. Unable to land any deal with Congress over the past three years, the President is hoping some of his ideas may have some election-year appeal. The administration has unveiled four Executive Orders aimed at bringing down drug prices. The orders were issued on Friday, July 24, 2020.
The four orders are:
- Require U.S. Federal community health centers to pass the negotiated discounts they receive from drug manufacturers on insulin and EpiPens directly to their patients.
- Allow the safe and legal importation of prescription drugs from Canada and other countries. The Trump administration was now allowing personal importation - a phrase used to describe when individual U.S. consumers buy drugs from other countries. The order also permits states, wholesalers and pharmacies to import FDA-approved drugs from foreign countries and sell them in the U.S. This includes a special provision to allow wholesalers and pharmacies to re-import insulin and biological drugs.
- A third order issued Friday revives a previously abandoned plan that would eliminate the rebates drug manufacturers pay to health-insurers in America. The White House last year withdrew an earlier version of this proposal after a Congressional Budget Office report estimated it would cost the U.S. taxpayers $177 billion over 10 years. But it remains to be seen if the rebate rule will ever be implemented. The order includes a caveat that the plan cannot be implemented if it will raise premiums.
- The last and most radical order involves requiring U.S. Medicare to pay the same price for drugs (Medicare Part B) — that other countries pay.
The drug industry is particularly leery of this last approach since Democrats want to use it more broadly to allow Medicare to directly negotiate prices. Instead of implementing a sweeping policy that would revive a long-stalled plan to cap American drug prices based on what manufacturers charge in foreign countries, he announced a one-month ultimatum for companies to propose alternative plans to reduce drug prices. Trump signed the fourth order but said he was holding it until Aug. 24 to give the industry time to “come up with something” to reduce drug prices. “The clock starts right now.”
Whether the Trump administration is capable of implementing the orders - or whether it even intends to do so – remains to be seen. The White House has limited power to implement drug pricing policies, and Executive Orders do not have any automatic legal force and can also be challenged in court.
And, with a presidential election just months away, it is doubtful any major decisions will come into force before the November 3rd vote.