Not long after President Donald Trump signed four executive orders focused on drug pricing, he last week laid out plans for a “Buy American” requirement for federal agencies purchasing essential medicines. As with the prior drug pricing proposals, industry pushback to the latest order was swift and harsh.
Under the new order, the federal government would develop a list of essential drugs, and then direct agencies such as the Department of Health and Human Services and Department of Veterans Affairs to purchase only from U.S. factories.
The plan “creates even more barriers to ongoing biopharmaceutical manufacturing and innovation,” Steve Ubl, head of industry trade group PhRMA, responded in a statement. Companies are working “around the clock” to deliver solutions to the COVID-19 pandemic, but each new executive order “adds another roadblock, making it harder to fight this pandemic,” Ubl said.
Trump’s “Buy American” order last week followed four others on drug pricing issued in late July. Those orders centered on creating discounts for insulin and epinephrine, eliminating rebates, allowing drug imports and creating an index tying U.S. prices to those elsewhere. The industry slammed the international pricing index, and sources told Politico that pharmaceutical representatives refused to attend a White House meeting about it.
On a conference call with analysts after the orders, Pfizer CEO Albert Bourla said he doesn’t “think there is a need, right now, for White House meetings.”
Following the latest order, Ubl said the moves “contradict and undermine each other, creating chaos in an industry that is on the frontlines of fighting COVID-19.” The administration is seeking to require domestic manufacturing and mandate lower prices simultaneously, Ubl said, which will result in “less investment in U.S. innovation” and potentially “major long-term supply chain disruptions.” Labor costs in the U.S. are higher than in India and China where many finished drugs and active ingredients are made.
Meanwhile, amid attention to growing list prices, a new report from IQVIA found that patient out-of-pocket spending has remained steady since 2014. Only 1% of prescriptions cost patients more than $125, according to the report. Patient advocates have been calling for lower prices and affordable copayments for many years, though public attention to price hikes greatly intensified in 2015 after a series of high-profile increases.
And following a round of drug price hikes in early July, GoodRx tracked 25 new price hikes toward the end of the month, including 17 increases of about 2.5% from Medimetrix on July 31. Takeda also raised several prices in late July. In total, manufacturers raised prices on 67 branded medicines in July by an average of 3.1%, according to GoodRx.