From U.S. Health and Human Services News Release 7/24/20
Trump Administration Announces Historic Action to Lower Drug Prices for Americans
President Donald Trump took historic action to deliver lower prescription drug prices to American patients. The President signed four Executive Orders on drug pricing directing the Secretary of Health and Human Services (HHS) to take several steps to deliver for American patients lower costs on prescription drugs, including insulin and epinephrine, and ensure Americans are getting the lowest price possible for their drugs.
The executive orders instruct HHS to take a number of actions:
- End a shadowy system of kickbacks by middlemen that lurks behind the high out-of-pocket costs many Americans face at the pharmacy counter. Under this action, American seniors will directly receive these kickback as discounts in Medicare Part D. In 2018, these Part D discounts totaled more than $30 billion, representing an average discount of 26 to 30 percent.
- Require federally qualified health centers who purchase insulins and epinephrine in the 340B program to pass the savings from discounted drug prices directly on to medically underserved patients. This will increase access to life-saving insulin and epinephrine for the patients who face especially high costs among the 28 million patients who visit FQHCs every year, over six million of whom are uninsured.
- Finalize a rule allowing states to develop safe importation plans for certain prescription drugs.
- Authorize the re-importation of insulin products made in the United States if the Secretary finds re-importation is required for emergency medical care pursuant to section 801(d) of the Food, Drug, and Cosmetic Act.
- Create a pathway for safe personal importation through the use of individual waivers to purchase drugs at lower cost from pre-authorized U.S. pharmacies.
- Take action to ensure that the Medicare program and seniors pay no more for the most costly Medicare Part B drugs than any economically comparable OECD country, ending foreign countries’ free loading off the backs of American taxpayers and pharmaceutical investments. This order takes effect in 30 days unless Congress acts.
HHS Secretary Alex Azar:
“President Trump has already done more than any other President to lower drug costs.
“No President has ever taken action on drug prices as bold as any one of today’s individual actions. Today’s executive orders will deliver billions of dollars in discounts directly to patients at the pharmacy counter, safe low-cost imported drugs for Americans, the best deals for America on highly expensive drugs, and direct discounts passed on to patients on important drugs from community health centers.
“The President’s new efforts to cut drug costs are about making it affordable for American patients to be in control of their own health, their own healthcare choices, and the care they decide on with their own doctor.”
CMS Administrator Seema Verma:
“Today’s Executive Order does what President Trump came into office with a mandate to do: disrupt a failed Washington status quo.
“Thanks to this bold step, Medicare will no longer be a powerless price taker, and American seniors will no longer foot the bill for the world’s innovation while other countries take a free ride.”
FDA Commissioner Stephen M. Hahn, M.D.:
Access to affordable medicines is a public health priority and bringing more drug competition to the market and addressing high costs are top priorities of the Administration, HHS and FDA. The FDA is undertaking a series of policy and scientific initiatives to help patients get access to the safe and effective treatments they require.
“We’ll work closely with HHS to implement the Executive Order as it relates to FDA. We remain committed to advancing the policies outlined in the Safe Importation Action Plan, as quickly as possible, as we continue our broader work to increase drug competition to benefit American consumers.”
HRSA Administrator Tom Engels:
“Today’s action by the President will ensure that the most vulnerable among us receive the greatest benefit from both the health center and 340B drug pricing programs.
“The executive order will further help these two programs work together to see to it that health center patients have access to both high quality primary care and life-saving, affordable medications.”
House Speaker Nancy Pelosi statement 7/24/20
Speaker Nancy Pelosi released this statement after President Trump signed executive orders on prescription drugs, once again failing to advance any rules to lower Americans’ prescription drug prices:
“Once again, President Trump has pulled his punch on reducing prescription drug prices, this time with empty Executive Orders that take no real action to lower Americans’ skyrocketing drug costs. After promising that he would ‘negotiate like crazy’ for lower prescription drug prices, it is clear that President Trump meant not negotiate at all.
“Instead of meaningfully lowering drug prices, President Trump’s Executive Orders would hand billions of dollars to Big Pharma. The last version of the Trump Administration’s rebate proposal would put Medicare beneficiaries at risk of higher premiums and total out-of-pocket costs and puts the American taxpayer on the hook for hundreds of billions of dollars. Thanks to President Trump, the pharmaceutical industry could see even bigger profits and even less restraint on what they charge seniors.
“While President Trump continues to cave to Big Pharma, Democrats have acted to advance real drug price negotiation with the Elijah E. Cummings Lower Drug Costs Now Act. If President Trump was serious about stopping drug companies from charging Americans more than they charge for the same medicines overseas, he would tell Leader McConnell to pass the Lower Drug Costs Now Act immediately. Sadly, Big Pharma calls the shots in the Trump White House.”Speaker Nancy Pelosi, 7/24/20
COMMENTARY: In spite of Speaker Pelosi’s partisan rebuttal, President Trump’s Executive Orders are bold. As cited in the State of the Union picture caption above, the President challenged the Senate, highlighting Iowa’s Senator Chuck Grassley, to pass legislation to lower prescription drug prices this year that he would sign into law.
Of all of the Executive Orders, the one dealing with the “middlemen” (first bulletpoint in HHS press release) is likely the most bold, because the President goes after a significant reason prescription drug prices are very high, in addition to reforms needed through Big Pharma, namely the pharmacy benefits managers (PBM), healthcare insurance providers and the rebates Big Pharma gives to PBMs and savings not passed along to consumers through the health insurance plans, including Medicare Part D.
When Speaker Pelosi points to H.R. 3, the “Elijah E. Cummings Lower Drug Costs Now Act” the House Democrats passed on a partisan vote back in December, NOWHERE in the legislation are reforms targeting PBMs and other “middlemen” present. Pelosi cited a previous rebate proposal from the Administration and higher costs, but the truth is, PBMs are tied to the same lobbyists who fight for labor unions, so estimates about PBM costs from unions dubious at best. This will be highlighted in a future article.
PBMs are dealt with in the Senate legislation, S. 2543, and I remember showing Congressman Sean Casten this verbiage from the bill after the Prescription Drug Prices Roundtable event he hosted in Barrington last November. The question, and this was brought up at the Roundtable, why were PBMs excluded from the then-proposed H.R. 3 the House was tweaking to pass in December?
As I told the church men’s group Saturday morning, their reaction, “follow the money” when I pointed this absence of PBM reforms from the House legislation.
Changing the language of payments to middlemen from “rebate” to “kickback”, the latter being illegal, is how the Executive Order will be enforced, and how the Trump Administration will fight to send the savings Big Pharma gives to PBMs and other middlemen to the pharmacy counter.
Changing a definition is not unprecedented. This is similar to how the Administration redefined insulin from a “drug” to a “biologic” in order to increase generic competition for insulin in late 2018.
McHenry County Blog will dig deeper on the middlemen Executive Order, but here is the text released by the White House on Friday:
- Executive Order on Lowering Prices for Patients by Eliminating Kickbacks to Middlemen: https://www.whitehouse.gov/presidential-actions/executive-order-lowering-prices-patients-eliminating-kickbacks-middlemen/
NOTE: Neither Congressman Sean Casten, Congresswoman Lauren Underwood, or Republican challengers Jeanne Ives or Jim Oberweis issued statements concerning the President’s Executive Orders announced Friday afternoon.