Trump administration releases four new executive orders, intending to reduce drug costs, before the November election
By Tom Brockbank, Senior Consultant, Pricing & Market Access
Trump announced on Friday 24th July, a one-month ultimatum for drug manufacturers to offer alternative plans to reduce drug prices. This will provide manufacturers an alternative option to the stalled plan to reference drug prices in foreign markets, as a way of capping the prices in the US. Although the White House has not yet released the text around its international pricing rule, it did clarify it will apply the Medicare Part B drugs; those administered in doctor’s offices or hospitals. Medicare will not pay more than any “economically comparable” country in the Organisation for Economic Co-operation and Development (OECD).
The second order, should it come into effect, would eliminate the rebates paid by drug makers to insurers. However, this order would only be implemented if there would be no increase to premiums to compensate. With the government’s own actuaries estimating there would be an increase to up to 25% in premiums, it is still unclear whether this order will be put into action.
The third order will ensure more freedom is being provided to Americans in terms of importing medicines from other countries. The new order says HHS will facilitate grants to individual consumers allowing them to import prescription drugs.
The final order would enforce that certain health centres to pass negotiated discounts on insulin and EpiPens to patients.
A group of pharmaceutical executives will be attending a meeting at the White House to discuss potential alternatives to Trump’s proposals, particularly the international pricing scheme. What will it mean for the future of drug pricing in the US, should they begin International Reference Pricing? Could we begin to see prices increase in Europe and Rest of World to compensate and ensure manufactures are still able to get a return on investment (ROI)? What reference rules are going to be applied and which markets will be in the US’s reference basket?
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U.S. Department of Health & Human Services, 2020. Trump Administration Announces Historic Action To Lower Drug Prices For Americans. [online] Available at: <https://www.hhs.gov/about/news/2020/07/24/trump-administration-announces-historic-action-lower-drug-prices-americans.html> [Accessed 28 July 2020].
Florko, N. and Facher, L., 2020. Trump Administration Unveils Executive Orders To Curb Drug Prices — But They Come With Caveats. [online] STATnews. Available at: <https://www.statnews.com/2020/07/24/trump-executive-orders-drug-pricing-election/> [Accessed 28 July 2020].