President Donald Trump signed four executive orders to lower the cost of prescription drugs in the US. Analysts acknowledge how the prescription drug market in the US may change.
This move was described as a “reckless distraction” to the coronavirus pandemic by the industry trade group PhRMA, the Pharmaceutical Research and Manufacturers of America.
The orders will undergo a regulatory review process. They aim to reduce the drug prices at least on par with their costs overseas.
According to Trump, Americans pay 80% more for prescription drugs than Canada, Germany, and other countries for some of the most expensive medicines.
“The four orders I’m signing today will completely restructure the prescription drug market in terms of pricing and everything else to make these medications affordable and accessible for all Americans,” Trump said at the White House.
“Under my administration, we’re standing up to the lobbyists and special interests and fighting back against a rigged system," he said.
Four executive orders
Trump’s first executive order focuses on high insulin prices. With this policy, federal community health centers will be required to give discounts they get on the drug and EpiPens directly to patients. The president believes the providers must not receive those discounts while charging customers “massive, full prices.”
For the second order, pharmacies, states, and wholesalers have been allowed to import drugs from Canada where they have lower cost than in the US. The Food and Drug Administration said that typically, it is illegal to import medications from other countries for personal use.
However, the pharmaceutical industry and regulators reiterated that importing drugs may not be safe for consumers. Sen. Bernie Sanders stated that importing drugs from other countries may boost competition and significantly lower prices.
The third order aims to remove the “middlemen,” also known as pharmacy benefit managers, from getting “gigantic discounts,” according to Trump. PhRMA said that drug price increases over the years have been modest and noted issues with the rebate system.
Alex Azar, secretary of the Department of Health and Human Services, said that drug companies spend around $150 billion in hidden kickbacks to middlemen often in exchange for advantageous insurance coverage for their drugs.
“The new rule would require those kickbacks be passed through to our seniors when they walk into the pharmacy,” Azar said, saying it would lower prescription drug costs for senior by about 26% to 30% or $30 billion a year.
The fourth order allows Medicare to buy drugs at the same price other countries spend for and carry out a so-called international pricing index to level drug prices in line with what other countries pay.
“Everyone will get a fairer and much lower price,” Trump said. “Under our ridiculous system, which has been broken for decades, we’re not even allowed to negotiate the price of drugs.”
However, Trump said he was holding the fourth order until August 24 to give the industry time to “come up with something” to lower drug prices. He mentioned that pharmaceutical company executives will be meeting at the White House on Tuesday.
Prescription drug spending in the US far is bigger that of other high-income countries, rising to $335 billion in 2018, according to US data. Several Republicans have rejected d such a proposal before, describing it “price controls.”
Trump considered lowering drug costs as one of his key health-care issues early in his term. However, the attention has been shifted to other priorities such as the teen vaping epidemic and now the coronavirus. The coronavirus pandemic has infected more than 4 million cases as of Friday, based on the data from Johns Hopkins University.
