New Executive Orders on Drug Pricing

On July 24, President Trump signed four executive orders all aimed at reducing the cost of prescription drugs. None of the orders will go into effect immediately as all will have to go through some kind of rulemaking process.

The orders included:

• Executive Order on Increasing Drug Importation to Lower Prices for American Patients, which aims to promote the importation of certain prescription drugs, including insulin, from other countries, specifically Canada.
• Executive Order on Access to Affordable Life-saving Medications, which would allow for individuals without insurance coverage to purchase insulin and injectable epinephrine from a Federally Qualified Health Center (FQHC) at a price that aligns with the cost at which that center acquired the medication. This cost could potentially be as low as a penny due to existing policies allowing FQHCs to purchase certain products at a steep discount due to participation in the 340B Drug Discount Program.
• Executive Order on Lowering Prices for Patients by Eliminating Kickbacks to Middlemen, which directs the Department of Health and Human Services (HHS) to finalize rulemaking that would require the rebates in Medicare Part D to be passed on to patients. The order specifies that this action cannot increase federal spending, Medicare beneficiary premiums or patients’ total out-of-pocket costs, which may make it more difficult to implement.

The fourth order, ‘the favored nations plan,’ would link payments for certain Medicare Part B drugs to the cost of those same drugs in other countries. This proposal is similar to one released in October 2018 by the Trump Administration – the International Pricing Index Model (IPI) for Medicare Part B Drugs. ASH opposed the implementation of the IPI Model because of the concern that it could negatively impact access to care for the patients ASH members serve. It is still unclear whether or not this order will be released – the Administration is allowing pharmaceutical companies a month to present an alternative plan.