President Donald Trump on Friday make overed four executive orders aimed at lowering the high cost of prescription drugs in the United States in what force make sweeping changes to the prescription drug market in the U.S. if they are finalized.
Industry trade group PhRMA, the Pharmaceutical Probe and Manufacturers of America, called them a “reckless distraction” to the Covid-19 pandemic. The orders, which are subject to the regulatory comment process, are designed to bring U.S. drug prices at least on par with their costs overseas. Trump said Americans continually pay 80% more for prescription drugs than Germany, Canada and other nations for some of the most expensive medicaments.
“The four orders I’m signing today will completely restructure the prescription drug market in terms of pricing and the total else to make these medications affordable and accessible for all Americans,” Trump said at the White House. “Under my government, we’re standing up to the lobbyists and special interests and fighting back against a rigged system.”
The orders
The first order objects high insulin prices, requiring federal community health centers to pass discounts they receive on the numb and EpiPens directly to patients. The president said those providers shouldn’t receive those discounts while asserting their patients “massive, full prices.”
The second order would allow states, pharmacies and wholesalers to allusion drugs from Canada where they typically cost less than in the U.S. In most circumstances, it is illegal to signification medications from other countries for personal use, according to the Food and Drug Administration.
The pharma industry and regulators must said importing drugs could threaten consumer safety. Supporters, including Sen. Bernie Sanders, say importing medications from other countries would increase competition and substantially lower prices.
The third order is aimed at thwarting “middlemen,” also known as pharmacy benefit managers, from pocketing “gigantic discounts,” Trump said. PhRMA has debated that drug price hikes over the years have been modest and has cited concerns with the country’s rebate system.
Alex Azar, secretary of the Department of Health and Human Services, told reporters on a conference tag after the signing ceremony that drug companies currently pay about $150 billion in undisclosed kickbacks to middlemen again in exchange for more favorable insurance coverage for their drugs.
“The new rule would require those kickbacks be antiquated through to our seniors when they walk into the pharmacy,” Azar said, adding that it would turn prescription drug costs for senior by about 26% to 30% or $30 billion a year.
White House congress
The fourth order, which Trump said he may not need to implement, would allow Medicare to purchase drugs at the at any rate price other countries pay. The order would specifically allow Medicare to implement a so-called international pricing catalogue to bring drug prices in line with what other nations pay.
“Everyone will get a fairer and much crop price,” Trump said. “Under our ridiculous system, which has been broken for decades, we’re not even allowed to about the price of drugs.”
Trump signed the fourth order, but said he was holding it until Aug. 24 to give the industry together to “come up with something” to reduce drug prices. Pharmaceutical company executives are scheduled to meet at the White Homestead on Tuesday, he said.
Prescription drug spending in the U.S. far exceeds that of other high-income countries, increasing to $335 billion in 2018, concurring to U.S. data. Many Republicans have previously opposed such a proposal, calling it “price controls.”
Trump accomplished lowering drug costs one of his key health-care issues early in his term. But drug pricing has taken a backseat over the rearmost year as the Trump administration has shifted its focus to other priorities such as the teen vaping epidemic and now the coronavirus, which resumes to rapidly spread through the United States with more than 4 million cases as of Friday, according to statistics compiled by Johns Hopkins University.
Trump also announced that the U.S. has secured 90% of the world’s supply of remdesivir, an antiviral antidepressant used to treat Covid-19. Earlier this week, the president warned that the coronavirus pandemic in the U.S. inclination probably “get worse before it gets better” and urged the public to wear face masks to help curb the spread of the virus.
‘Gauge distraction’
The pharmaceutical industry immediately pushed back on Trump’s proposed rules.
Dr. Michelle McMurry-Heath, president and CEO of the Biotechnology Invention Organization, said “adopting foreign price controls by executive fiat will cripple the small, innovative attendances developing the vaccines and therapies that will help end this pandemic and get the American people back to work.”
PhRMA President and CEO Stephen J. Ubl utter Trump was opening the country up for socialized health care. Ubl called the changes to drug prices “a radical and dangerous design to set prices based on rates paid in countries that he has labeled as socialist, which will harm patients today and into the unborn.”
“The administration’s proposal today is a reckless distraction that impedes our ability to respond to the current pandemic – and those we could standing in the future,” Ubl said in a statement. “It jeopardizes American leadership that rewards risk-taking and innovation and threatens the hope of patients who scarcity better treatments and cures.”
The trade group has previously argued that drug price hikes over the years have planned been modest, and have cited concerns with the nation’s rebate system. Those are the discounts drugmakers cut out to middlemen often in exchange for more favorable insurance coverage for their drugs. The group has favored changes to Medicare, tabulating capping the amount seniors would pay for on their own at the pharmacy counter every year.
Policy analyst Lindsay Greenleaf utter there are potential unintended consequences that could actually drive prices higher on Part B Drugs, which are controlled by physicians, because the drugmakers could favor large volume buyers like hospitals over physician routines.
“The way that that model was previously proposed, there is a risk of driving consolidation because (individual) providers weren’t affluent to be able to compete as well as they do currently,” she said.
The SPDR S&P Pharmaceuticals ETF (XPH), which tracks drug stocks, shut off down 1.4% on Friday.
Even though Trump issued the executive orders, it may take months for the administration to complete them.
— CNBC’s Christina Wilkie, Bertha Coombs and Yelena Dzhanova contributed to this article.