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Stakeholders Take Issue with Trump Drug Pricing Orders

— Insurers, PBMs unhappy

MedpageToday
President Donald Trump signs an executive order

WASHINGTON -- Several healthcare groups found fault with President Trump's four executive orders aimed at decreasing the cost of prescription drugs, announced Friday.

"Action must be taken to hold Big Pharma accountable for their out-of-control drug prices," Matt Eyles, president and CEO of America's Health Insurance Plans, , which included one dealing with drug rebates. "But the administration's rebate rule takes us in the complete opposite and wrong direction, and the administration's own analysis confirms this assessment."

"We are concerned that the prescription drug importation plan outlined in the executive order does not strike the critical balance between affordability and access to innovation and maintaining safety," . "The prescription drug importation plan does not include details on the robust safeguards necessary to ensure the safety of the prescription drugs imported into the U.S."

The executive orders Trump signed on Friday included the following:

  • Drug company discounts. The first order directs federally qualified health centers to pass along massive discounts on insulin and epinephrine received from drug companies to certain low-income Americans, according to a .
  • Drug importation. The second executive order will allow state plans for safe importation of certain drugs, authorize the re-importation of insulin products made in the United States, and create a pathway for widespread use of personal importation waivers at authorized pharmacies in the United States.
  • Pharmacy rebates. The third order will prohibit secret deals between drug manufacturers and pharmacy benefit manager middlemen, ensuring patients directly benefit from available discounts at the pharmacy counter, according to the fact sheet.
  • Medicare Part B pricing. The fourth order ensures that the United States pays the lowest price available in economically comparable countries for Medicare Part B drugs, the fact sheet explained.

Trump called the last order "the granddaddy of them all" and added that it "will end global freeloading on the backs of American patients and American seniors." This order, however, may not go into effect if drugmakers can come up with an alternative plan to reduce Part B prices; they have a deadline of Aug. 24 to come up with a plan, Trump noted, adding that he will be meeting with drug company executives on Tuesday to begin the discussion.

Analysts had some questions about the orders. "Importation may allow some states and wholesalers to access drugs at lower prices," said Chad Brooker, of the healthcare consulting firm Avalere, in an emailed statement. "However, there remains significant uncertainty over the level of interest in these new flexibilities, as well as safety and operational aspects."

Another Avalere analyst, Miryam Frieder, said that the executive order on drug rebates going to customers at the pharmacy counter "makes clear the administration is once again focused on fundamentally reshaping the current system of manufacturer rebates in the U.S. Given the requirement that premiums not increase as a result of the proposal, now is the time for stakeholders to engage with their preferred approaches."

Although many healthcare groups panned the executive orders, there were some supporters. "COA is extremely supportive of today's executive order to ensure Medicare beneficiaries receive the rebates negotiated by pharmacy benefit managers (PBMs)," Ted Okon, executive director of the Community Oncology Alliance, a trade group for oncology practices,. "As President Trump noted in his remarks, PBMs are secretive corporate middlemen who provide little to no true value to patient health, yet significantly increase patient drug costs and fuel drug prices."

Not surprisingly, the PBMs were unhappy with the rebate proposal. "Reviving a rebate reform proposal now does not address the underlying flaws -- that it will drastically increase Medicare premiums for America's seniors and most vulnerable," J.C. Scott, president and CEO of the Pharmaceutical Care Management Association -- a trade group for PBMs -- .

"This policy does nothing to address drug prices, it only serves to create uncertainty and raise premiums for seniors while imposing nearly $400 billion in additional taxpayer costs, all at a time when taxpayers are already footing additional costs to counter the pandemic and the national debt is at record levels."

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    Joyce Frieden oversees 51˶’s Washington coverage, including stories about Congress, the White House, the Supreme Court, healthcare trade associations, and federal agencies. She has 35 years of experience covering health policy.