Welcome to the FiercePharma political roundup, where each Monday we’ll highlight developments in Washington, D.C., and elsewhere that could affect drug pricing and how drugmakers operate.
After touting a series of executive orders on drug pricing in late July, President Donald Trump has now unveiled the most significant among them—an order tying Medicare's drug prices to much lower costs in other developed countries. The biopharma industry pushed back hard, and it’s unclear exactly when or how the changes would be implemented.
The executive order, released Sunday, says Medicare should not buy certain Part B or Part D drugs unless at prices paid by “at a minimum, the lowest price at which the manufacturer sells that drug to any other developed nation.” In Part D, the plan would apply “where insufficient competition exists” and where “seniors are faced with prices" higher than those in other developed nations.
Under the order, HHS secretary Alex Azar is to begin developing payment plans and working through the rulemaking process. Experts said the order won’t be immediately implementable.
Sunday’s order “does not by itself do anything,” Kaiser Family Foundation executive vice president of health policy Larry Levitt wrote on Twitter. “It has to be followed up by regulations, which will take time.”
“Trump has a history of bold talk on drug prices, only to pull back when it comes to putting actual regulations in place,” he said.
But by expanding the order to include drugs in Medicare Part D, the policy would “apply much more broadly than any policy change we've seen so far from the administration, and is an exciting new development,” drug pricing expert Rachel Sachs wrote on Twitter.
The biopharma industry responded swiftly, with both major trade groups calling the order “reckless.” BIO threatened legal action.
PhRMA is committed to working through drug pricing issues with the government, CEO Stephen Ubl said in a statement. But the administration “has doubled down on a reckless attack on the very companies working around the clock to beat COVID-19," he said.
The order is an “irresponsible and unworkable policy that will give foreign governments a say in how America provides access to treatments and cures for seniors and people struggling with devastating diseases,” Ubl said.
BIO CEO Michelle McMurry-Heath echoed the sentiment. Amid the pandemic, it’s “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,” she said.
“This reckless scheme will eliminate hope for vulnerable seniors and other patients waiting for new treatments by drastically reducing investment in cutting-edge scientific research and development,” she added. “That is why we will use every tool available—including legal action if necessary—to fight this risky foreign price control scheme.”
The order follows a series of others unveiled in late July that center on creating discounts for insulin and epinephrine, eliminating rebates and allowing drug imports. The Trump administration said it gave the pharma industry time to negotiate on the favored-nations clause, but those talks didn’t yield an “acceptable alternative,” White House deputy press secretary said, as quoted by CNN.