On Friday, United States President Donald Trump signed four Executive Orders focused on lowering drug prices, including insulin.
The first Order, Executive Order on Access to Affordable Life-saving Medications, directs federally qualified health centers (FQHCs) to pass along discounts on insulin and epinephrine received from drug companies to certain low-income Americans.
The second Order, Executive Order on Increasing Drug Importation to Lower Prices for American Patients, allows for individual state plans for the safe importation of certain drugs, authorizes the re-importation of insulin products made in the United States, and creates a pathway for widespread use of personal importation waivers at authorized pharmacies throughout the United States.
Based on the remarks President Trump gave regarding the Executive Orders, it seems that Florida may be the model for other states who wish to participate.
The third Order, Executive Order on Lowering Prices for Patients by Eliminating Kickbacks to Middlemen, prohibits secret deals between drug manufacturers and pharmacy benefit manager middlemen, ensuring patients directly benefit from available discounts at the pharmacy counter.
The fourth Order aims to ensure that the United States will pay the lowest price available in economically comparable countries for all Medicare Part B drugs. Interestingly, this fourth Order does not become effective for one month, on August 24th, and is written such that it will become effective “absent successful negotiations with drug company executives.” President Trump wants to have input from the pharmaceutical industry on how they think we can reduce the 80% “markup” the United States pays for Part B drugs than other countries.
President Trump noted that “as a result of” these Orders, “the heads of the major drug companies have requested a meeting to discuss how we can quickly and significantly lower drug prices and out-of-pocket expenses for Americans.” He further referenced the future implementation date of the fourth Order (August 24th), saying that if the “talks are successful, we may not need to implement the fourth Executive Order, which is a very tough Order for them.”
Implementation Timeline
These Executive Orders may not see immediate results, as the power to enact policy through Executive Order is limited. Therefore, the Orders instruct the Department of Health and Human Services (HHS) to move forward with the formal rulemaking process. Some of the formal rulemaking processes have already begun, for example, steps have been taken toward allowing importation of drugs from Canada.
Additionally, the Order regarding eliminating kickbacks to middlemen cannot go into effect until the HHS Secretary certifies that enacting policies to achieve the intended results will not increase federal spending, Medicare beneficiary premiums, or patients’ total out-of-pocket costs.
As President Trump stated in his remarks during the signing of the orders, he expects them to “completely restructure the prescription drug market, in terms of pricing and everything else, to make these medications affordable and accessible for all Americans.”
Reaction
PhRMA didn’t mince words in their reaction to these executive orders a statement from PhRMA president and CEO Stephen J. Ubl
“In his 2020 State of the Union Address, President Trump declared that ‘we will never let socialism destroy American health care.’
“Yet, in the middle of a global pandemic, when nearly 145,000 Americans have lost their lives and millions of others have suffered untold economic hardships, this administration has decided to pursue 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 research-based biopharmaceutical industry has been working around the clock to develop therapeutics and vaccines to treat and prevent COVID-19. The administration’s proposal today is a reckless distraction that impedes our ability to respond to the current pandemic – and those we could face in the future. It jeopardizes American leadership that rewards risk-taking and innovation and threatens the hope of patients who need better treatments and cures.
“The president’s attempt to open our country up to socialized health care sets America, our economic recovery and scientific progress back at a time when we need them most.”
Lately judges have thrown out a vast majority of the President’s executive orders on healthcare, in the coming weeks it will be interesting to see which of these executive orders is still standing.