Trump signs Executive Order to reduce drug costs


  • President Donald Trump on Sunday signed an executive order that aims to lower the drug prices sold in the US.
  • The order mandates the Health and Human Services secretary to test a payment model for Medicare to quickly pay “no more than the most-favored-nation price.” 
  • The pharmaceutical industry condemned the move as there was no settlement made with the White House, and said that it would consider taking legal actions to counter the order.

On Sunday, President Donald Trump signed an executive order (EO) that mandates the cost reduction of drugs sold in the US similar to the prices offered in other countries.

Trump touted the new order, tweeting: “Just signed a new Executive Order to LOWER DRUG PRICES! My Most Favored Nation order will ensure that our Country gets the same low price Big Pharma gives to other countries. The days of global freeriding at America’s expense are over…”

He also added that “prices are coming down FAST! Also just ended all rebates to middlemen, further reducing prices.”

The new order instructs the Health and Human Services secretary to test a payment model for Medicare “immediately” to pay “no more than the most-favored-nation price.” This would mean obtaining the lowest price availed by other developed nations for “high-cost” prescription drugs and other medicines.

The plan would also assess whether patients buying the lowest feasible cost would lessen “poor clinical outcomes and increased” expenses. 

Several administrative steps are needed to be undertaken before the policy can push through. The health secretary shall lay down the plan details. There will also be a process on how the plan will practically work. It is still unknown, though, when the scheme will take effect.

The order follows after Trump signed on July 24 four other mandates that also aimed to minimize drug prices. The initial order reading was extended as the new scheme will now be applicable to both Medicare Part B and Part D drugs.

The EO was intentionally signed later so the White House and pharmaceutical industry can still align and reach a settlement. However, no agreement was reached as the White House said on Sunday, but Trump still proceeded nonetheless.

The pharmaceutical industry criticized the unexpected order and also floated to seek legal remedies.

“With scientists and researchers at America’s biopharmaceutical companies working around the clock to fight a deadly pandemic, it is simply dumbfounding that the Trump administration would move forward with its threat to import foreign price controls and the inevitable delays to innovation that will follow,” Biotechnology Innovation Organization CEO Michelle McMurry-Heath said.

McMurry-Heath also said that they will “use every tool available – including legal action if necessary – to fight this risky foreign price control scheme.”

On the other hand, the order does not include those who are not covered by Medicare.

The mandate was also controversial as many in the GOP are against the “price control” notion, a plan that is linked with Democrats’ proposals.
The drug cost reduction initiative has become a major issue for the Americans as the order came weeks before the election.

Source: The Hill

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