US President Donald Trump on Friday said he will sign four executive orders related to drug pricing, including one that allows drug imports from Canada, another requiring discounts from drug companies now captured by the "middle man" to be passed on to patients, and a third that seeks to lower insulin and EpiPen costs. A fourth executive order, which might not be needed if upcoming talks with pharmaceutical firms are successful, would implement a "favoured nations" plan requiring Medicare to purchase drugs at the same price that other countries pay.
Trump stated that Americans often pay 80% more for prescription drugs than Germany, Canada and other countries for some of the most expensive medicines, adding that the executive orders, which are subject to a regulatory review process, are designed to bring US drug prices at least on par with costs abroad.
'Complete restructuring' of prescription drug market
The orders "represent the most far reaching prescription drug reforms ever issued" in the US, Trump said, adding that they will "completely restructure the prescription drug market in terms of pricing and everything else to make these medications affordable and accessible for all Americans."
The first order requires federal community health centres to pass on negotiated discounts they receive for insulin and EpiPens directly to patients. In his remarks, the president said these providers should not receive those discounts while charging their patients "massive, full prices."
The second order would permit states, wholesalers and pharmacies to import FDA-approved drugs from foreign countries and sell them in the US. The order also includes a special provision to allow wholesalers and pharmacies to re-import insulin and biological drugs. However, Canadian officials have previously come out against the idea, warning that increased drug exports to the US could potentially lead to shortages in Canada, while the pharmaceutical industry has argued importation could undermine US quality standards.
International pricing index
Trump said the third order is intended to prevent pharmacy benefit managers (PBMs) from pocketing "gigantic discounts" by ensuring that rebates drugmakers now pay to them get passed directly to patients when they buy a medication. Last year, the US government scrapped a proposal aimed at curbing drug rebates to PBMs after the Congressional Budget Office estimated the plan would cost taxpayers $177 billion over 10 years, and was unlikely to lead to drugmakers lowering prices.
Meanwhile, the fourth executive order would allow the use of an "international pricing index" as a benchmark to set what Medicare pays for certain drugs administered in doctor's offices, including many cancer treatments. This would apply to the most expensive medications covered by Medicare's Part B, which pays for outpatient care.
Trump is scheduled to meet with drug executives on July 28 to hear their proposals on how to cut costs. He said he will hold the fourth order until August 24 to give the industry time to "come up with something" to reduce drug prices. "Maybe they have an idea that's good," Trump said, "but it's got to be very substantial."
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