Northwest Arkansas Democrat-Gazette
Trump signs executive orders in push to lower Rx drug prices
President Donald Trump announced new policies Friday aimed at lowering prescription drug prices under Medicare by linking them to rates paid in other countries and allowing Americans to buy prescription medication imported from Canada.
The president also announced a drug rebate rule that removes legal shields for reimbursements paid by drugmakers to middlemen and insurers, and a new policy to require federal community health centers to pass discounts they receive on insulin and EpiPens directly to their patients. EpiPens are emergency epinephrine injectors to treat severe asthma attacks and allergic reactions.
The orders “represent the most far-reaching prescription drug reforms ever issued by a president,” Trump said at an event in Washington. They will “completely restructure” the prescription drug market, he said.
However, the moves are largely symbolic because the orders are unlikely to take effect anytime soon, if they do so at all, since the power to implement drug pricing policy through executive order is limited. Voters will not see an
impact before the November election, and the drug industry is sure to challenge the moves in court.
The order tying prescription-drug prices to international benchmarks, which Trump described as the “most favored nations” clause, won’t take effect until Aug. 24 to give drugmakers time to come up with alternative measures for lowering costs, Trump said.
He said he plans to meet with drug company executives Tuesday — at their request — to discuss their ideas for lowering prices. White House aides spent much of Thursday fielding calls from executives expressing frustration that the administration is pushing the orders even as it pushes the industry — including awarding companies billions of dollars — to develop and manufacture vaccines and treatments for covid-19, the disease caused by the coronavirus, according to a senior administration official and a Republican lobbyist.
Trump praised the administration’s work in pushing for the development of coronavirus treatments and a vaccine on a historically ambitious timeline, but did not laud the companies doing most of the research and development.
‘CRIPPLE’ SMALL COMPANIES
The drug industry quickly pushed back on Trump’s order.
Michelle McMurray Heath, chief executive officer of the Biotechnology Innovation Organization, said adopting foreign price controls would “cripple the small, innovative companies developing the vaccines and therapies that will help end this pandemic and get the American people back to work.”
Stephen Ubl, chief executive officer of the Pharmaceutical Research and Manufacturers of America, an industry lobby, upbraided the administration for pursuing “a radical and dangerous policy to set prices based on rates paid in countries that he has labeled as socialist, which will harm patients today and into the future.”
The international drug price rule is the only policy backed by the administration that would increase the government’s ability to decide what it will pay for medications. Health officials estimate the policy change proposed by Trump would save Medicare $17 billion in the first five years.
Drug companies have pushed back fiercely on plans to import cheaper drugs from Canada, arguing there is “no way to guarantee the safety of drugs that come into the country from outside the United States’ gold-standard supply chain.”
The Canadian government also opposes the measure, warning that the drug supply for Canada’s 37 million residents cannot possibly fulfill the demands of the much larger U.S. market and that the move would cause severe shortages for Canadians.
REBATES, DISCOUNTS
The president also revived his drug rebate plan, designed to ensure the rebates that drugmakers now pay to benefit managers and insurers get passed directly to patients when they buy a medication.
Those rebates create incentives for higher drug prices, drug companies have argued, because they push companies to raise prices in order to meet discount demands by drug middlemen. Instead of middlemen receiving discounts based on the price of drugs, they’d get a fixed fee under the policy change.
The White House last year withdrew an earlier version of the proposal, after the Congressional Budget Office estimated it would cost taxpayers $177 billion over 10 years.
The plan to use the federal drug discount program, known as 340B, for hospitals to get cheaper insulin and EpiPens is new. The 340B program requires drug companies that want to sell their drugs through state Medicaid plans to offer steep discounts to hospitals that serve primarily low-income patients. The program has grown considerably in the past few years.
The executive orders were panned as an empty political gesture by at least one advocacy group pushing lower drug prices.
“These executive orders are not about policy, they’re about politics,” said Margarida Jorge, campaign director for Lower Drug Prices Now. “The only reason for President Trump’s rekindled interest in lowering drug prices is his dwindling poll numbers, and realization that our country’s senior citizens are abandoning him thanks to his bungled handling of the coronavirus crisis.”
PANDEMIC COMPLICATES ISSUE
White House Chief of Staff Mark Meadows has led the effort to turn previous administration proposals into executive orders the president could sign this summer, according to a senior administration official and two industry lobbyists who spoke on condition of anonymity. Several White House aides oppose the effort, arguing the administration should not alienate drug companies when it is so dependent on them for help ending the pandemic.
The administration has given the industry billions of dollars to aid with the development and manufacturing of vaccines, which some hold out as the only way to end the pandemic.
Trump has repeatedly pushed Health and Human Services Secretary Alex Azar and other aides to come up with drug pricing “wins” that he can tout on the campaign trail, but most of the administration’s proposals have not come to fruition. Infighting, a court ruling in favor of the drug industry and policy disputes have thwarted several of the administration’s previous efforts. Congress has also so far failed to pass White House-backed drug pricing legislation.
Democrats, meanwhile, are eager to draw a contrast between Trump and their own sweeping plans to authorize Medicare to negotiate lower prices directly with pharmaceutical companies, an idea the president had backed as a candidate. A bill by Speaker Nancy Pelosi already passed the House and aligns with presidential candidate Joe Biden’s approach.
A drive to enact major legislation this year stalled in Congress. Although Trump told Republican senators that lowering prescription prices is “something you have to do,” many remain reluctant to use federal authority to force drugmakers to charge less.