On Friday, President Trump signed four executive orders aimed at lowering drug prices, seeking to take action on a key issue for voters in an election year.
The orders signed by Trump would move towards allowing states to develop plans to import cheaper drugs from Canada, eliminate a system of drug discounts known as rebates in a bid to simplify the system, and seek to make EpiPens and insulin more affordable for patients of community health centers. It is unclear, though, when the moves can be finalized and take effect.
Trump also announced a fourth, more sweeping order, seeking to slash the price that Medicare pays for drugs to be in line with prices paid in other countries, what Trump called “most favored nation” status for the U.S.
But in a surprise move, Trump said that order’s implementation would be delayed until Aug. 25 to give pharmaceutical executives, who strongly oppose the idea, a chance to propose an alternative.
Trump said he would be meeting with drug company executives at the White House on Tuesday, offering a concession that the order will not be implemented right away.
Trump said at an event at the White House Friday that the orders “will lead to massive reduction in drug costs.”
“This is just a big day,” Trump said. “I’ve been waiting for this day for a long time.”
It’s unclear when any of the orders will actually take effect, meaning consumers will not notice a difference right away.
The president’s power to enact policy through executive order is limited, so the orders largely just command the Department of Health and Human Services to move forward with the formal rulemaking process, which takes time.
In some cases, it has already begun. Trump already took steps towards allowing importation of drugs from Canada last year, for example, and Friday’s order calls for that process to be completed.
The pharmaceutical industry had rallied to try to stop the “most favored nation” order, and Trump said he agreed to their request for a meeting and to delay the order until after that meeting.
“If these talks are successful we may not need to implement the 4th executive order,” Trump said.
Democrats dismissed the actions as election-year posturing, arguing the orders will not actually take effect and reduce drug costs.
“President Trump’s Executive Orders are a desperate and ineffective election year stunt to try to convince people he’s following through on his promise to lower prescription drug prices,” said House Energy and Commerce Committee Chairman Frank Pallone Jr.
He noted the Trump administration opposes the sweeping bill to lower drug prices passed by House Democrats in December, which would allow the secretary of Health and Human Services to negotiate lower prices.
On the other side of the aisle, many congressional Republicans have objected to the “most favored nation” idea, saying it is a price control that violates free-market principles.
Representative Kevin Brady, the top Republican on the House Ways and Means Committee, distanced himself from the White House proposal in a statement on Friday, saying a much narrower bill from House Republicans is a better idea. “We believe this is a better approach to achieve the President’s goal than importing foreign price controls that slow down the development of new medical cures,” Brady said.
The pharmaceutical industry blasted the idea as well, linking it to their fight against coronavirus by arguing it would hurt development of new treatments and vaccines.
“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,” said Steve Ubl, CEO of the Pharmaceutical Research and Manufacturers of America
Drug company executives will have their chance to make their case at the White House on Tuesday.
The pharmaceutical industry actually supports one of the orders, to eliminate the discounts they issue, known as rebates. But a different arm of the health care industry, companies that negotiate drug prices known as pharmacy benefit managers (PBMs), oppose the rule and argue it will lead to higher premiums.
The text of the order released Friday states that the new rules cannot go into effect until the HHS secretary certifies that the move will not increase federal spending or premiums. An earlier version of the proposal was projected to do both, meaning that it is unclear if the new changes will actually end up going into effect.