White House Introduces Executive Orders Addressing Drug Prices

President Donald Trump has announced four new executive orders that are aimed at lowering drug prices. The orders instruct the Department of Health and Human Services (HHS) to take several actions, including:

  • eliminate rebates drug makers pay to insurers, instead applying these discounts to American seniors through Medicare Part D
  • require federally qualified health centers that purchase insulins and epinephrine, including EpiPens, in the 340B program to pass negotiated discounts directly on to patients
  • allow individual waivers for personal importation, or consumer purchase of drugs from other countries, including reimportation of insulin products made in the U.S. if required for emergency medical care
  • cap prices for drugs covered under Medicare based on what drug makers charge in other economically comparable countries that belong to the Organization for Economic Cooperation and Development (OECD)

Health policy experts say the orders will likely offer patients only minimal relief and may take months to go into effect, as several come with caveats that may make implementation difficult. The order eliminating rebates, for example, includes a caveat stating the rule cannot be implemented if it will raise premiums; estimates from the government’s actuaries predict that the plan would increase premiums by up to 25%.

On August 6, President Trump signed another executive order mandating that certain “essential medicines,” as determined by the FDA, that are purchased by the federal government be manufactured domestically. The order would also reduce some FDA and Environmental Protection Agency regulations to enable domestic manufacturers to meet the increased demand.

Sources: HHS press release, July 24, 2020; STAT, July 24, 2020; NPR, July 24, 2020.