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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowPresident Donald Trump on Tuesday signed an executive order intended to lower drug prices, returning to a longtime priority and vowing changes to drug-pricing initiatives rolled out by the Biden administration.
Trump’s order contains a number of policy ideas, including proposals to further lower the cost of insulin and injectable epinephrine for low-income and uninsured Americans; importing more low-cost drugs from abroad; and streamlining the federal approval process for generic and biosimilar versions of branded medications.
Trump also said he would build on a popular program launched by the Biden administration to directly negotiate the price of drugs with the pharmaceutical industry—but support a change sought by the industry, which has called for delaying the period before negotiations can begin on some of the priciest medications, a category known as small-molecule drugs.
“It is time to restore the progress our Nation made in my first term to deliver lower prescription drug prices by putting Americans first and making America healthy again,” Trump wrote in the order.
The Biden administration regularly touted its own efforts to lower drug prices, with former president Joe Biden and his allies saying that Medicare’s initiative to negotiate with the pharmaceutical industry resulted in about $6 billion in initial savings on some of the priciest drugs used by older Americans.
Steve Knievel, a drug-pricing advocate at Public Citizen, a nonprofit consumer advocacy group, said that some of the Trump administration’s aims were “laudable,” such as the president’s pledge to achieve more savings through drug-price negotiations than the Biden administration did. But he criticized Trump’s concession to the pharmaceutical industry by supporting a delay to negotiations on some of the industry’s priciest drugs.
“It strains credulity that they are serious when they say they want to negotiate deeper discounts—when in the same breath they are indicating they want to delay drug price negotiation,” Knievel said.
Under the 2022 Inflation Reduction Act, federal officials can begin negotiating the price of small-molecule drugs seven years after the drugs are approved by the Food and Drug Administration and can set new prices for the drugs two years later. Delaying the timeline for negotiations on those drugs would require an act of Congress.
Some congressional Republicans have introduced legislation to delay the negotiations, echoing the drug industry’s argument that the current timeline is too aggressive and threatens their incentives for research and development of new medications. Those GOP lawmakers and the drug industry have pointed to the longer timeline allowed before negotiations can begin on biologics, a different kind of drug that tend to be more complex; those drugs are not eligible for negotiation until 11 years after FDA approval, with new prices set two years later.
David Ricks, CEO of Indianapolis-based pharmaceutical giant Eli Lilly and Co., has been critical of the timeline distinctions and has said the differences can significantly limit investment in small-molecule drugs.
Other ideas in Trump’s proposal, such as importing more low-cost drugs from countries like Canada, are not supported by the pharmaceutical industry.
Rachel Sachs, a law professor at Washington University in St. Louis, questioned whether Trump’s drug-pricing proposals could be stymied by other actions that his administration had taken. She pointed to recent cuts at the Department of Health and Human Services, including layoffs to FDA support staff who helped support drug reviews, even as Trump says that he wants to accelerate the approval of generic medications.
“Some of these ideas will be very difficult to implement in the face of the significant gutting of various parts of HHS,” said Sachs, who served as a senior adviser in the HHS general counsel’s office during the Biden administration. She added that some of the policies were “repeats” of ideas that Trump had pursued in his first term, such as importing drugs, to limited or negligible success.
“The language is vague enough that it will be important to watch closely what the administration does,” Sachs said.
Trump first campaigned on lowering drug prices in his successful 2016 presidential campaign, an idea that won him common ground with some Democrats. But some of his administration’s proposals to lower drug prices were blocked in the courts or not finalized, while the Biden administration went further and ensured that some ideas pushed by Trump, such as cuts to out-of-pocket costs for insulin, were enshrined in law.
Majorities of Americans support efforts by the federal government to lower drug prices, according to polls by KFF, a nonpartisan health-care research and polling organization, and other groups. Asked by KFF in January about priorities for the incoming Trump administration, 55 percent of respondents said that expanding the number of prescription drugs that the federal government negotiates the price on for people with Medicare should be a “top priority.”
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lol. News flash; He does given a flying _ _ _ _ about drug prices. Someone told him it would be a good thing to say.
Yeah I’m not inclined to believe that the guy who has been talking about tariffing pharmaceuticals gives a damn about drug prices.
Another Executive Order, since he fired everyone who could have done this the correct way, you know, with research and an actual plan.
Trump promised the same thing last term. Biden got it done. Trump didn’t and probably won’t again.
Seems like we’re overcomplicating the situation.
In exchange for the U.S. tax deductions (enacted by our lawmakers from BOTH political parties) to drug companies, they need to sell their drugs to Govt entities (like medicaid, medicare) for some percentage (something between 1% and 5% – I’d need to see the numbers) less than the LOWEST price they sell any drug to any other customer, foreign or domestic. In other words, Most Favored pricing goes to the U.S. Govt. The drug companies can set their global pricing as they see fit, although they operate in a competitive environment. The only caveat is the U.S. Govt gets Most Favored pricing in exchange for U.S. tax deductions for the drug companies.
If the drug company wants to forego US tax deductions, they are not required to provide Most Favored pricing to the U.S. Govt. Of course, then the U.S. govt can then authorize generic production of any drug.
Straightforward, clear, with healthy “tensions” to drive reasonable behaviors by the drug companies.
LD, I like your plan.
Its Infrastructure Week all over again!
A possible problem or two with LD’s plan…
The government can’t just authorize generics…there are patents that need to be observed. Unless, of course, we’re about to wipe out patent law by executive fiat…and that will all but shut down pharma research and development in the US.
What this does is what we pretty much have already. Pharma is free to sell its product around the world at whatever price. Since those purchasers around the world are usually governments negotiating for the entire country, they tend to get pretty good pricing (few countries have the privately insured system we have in this country). Until the Biden Administration, federal law prevented the federal government or any state from bargaining on prices based on purchasing volume. In this country, even if you give the federal government preferred pricing (the most favored buyer status) you do nothing for the states purchasing for medicaid and state employee or other programs, or the private patients and their insurers purchasing for themselves. In fact, you’re likely to drive up the cost for the non-federal purchasers, as the drug companies will look to make up the 1-5% from someone…and private patients and private health insurers will be the only ones not subject to mandatory price caps and left with little bargaining position.
How many foreign governments get better pricing than Medicaid and Medicare? Would love to see that data. Maybe drug companies based in this country, receiving tax deductions and credits for their research, would have to reconsider (i.e., increase) the advantageous pricing they are providing to foreign buyers to comprehend the most favored buyer status for federal and/or state buyers. Foreign buyers don’t seem to worry as much about U.S. patents – see India).
Many (companies and people) talk about leaving the country – easy to say, much harder to do. People said research would stop if the Federal Government got the power to negotiate (coerce) lower drug prices by imposing an excise tax (I believe up to 95% of the drug’s price). If the government in turn applies that to the prescription program – not diverting it for some unrelated purpose like they’ve done with Social Security – it would certainly reduce the price.
Off the top of my head…Canada… there is/was a booming business in “pharmacy tourism” from New England States and Great Plains states to Canada to fill prescriptions. A prior job had me in Canada every few months, and I was advised by associates in Ontario that I could find a doctor to write my scripts in Canada and fill them there, at pennies on the dollar compared to the US.
Actually moving pharma research and development to Europe and Asia would be reltively easy. Ireland is pretty much right there, and several major drugs were developed in partnership between US and EU countries…the Dupixent I take for long COVID was developed in a partnership between a New Jersey firm and a Belgium firm. Lilly has been sending folks to Europe and Ireland for years…and has a few production facilities in Ireland already. Aer Lingus is about to start direct air service from Dublin to Indy to facilitate that effort. Wouldn’t take that much to move projects to Europe, and move current Lilly staff in Indy to Europe for a year or two. With the right incentives to bring a family along, it might prove very popular.
Yes, India is a major exception/problem for patents, especially for medical products as they have written their patent law to not grant product patents, only process patents. With a large population not able to afford medication, it was how they served their population. I’m not defending it…but that is the reality. But India is an exception, not a the general rule. And its not just US patents, its all medical patents…EU, Asian, US.