President Trump’s Executive Orders to Lower Cost of Life-Saving Medications
On July 24th, President Donald Trump aimed to pass four new executive orders which look to reduce the cost of some life-saving prescription drugs, especially for seniors, and those who don’t have medical insurance. The President has shown interest in such orders since as early as 2018, being quoted as saying, “One of my greatest priorities is to reduce the price of prescription drugs. (1)”. So what was put into these executive orders, and what do they aim to achieve for the American people?
The first executive order passed makes Federally Qualified Health Centers (FQHC) pass along the discounts they receive from drug companies on insulin and epinephrine to certain low income Americans (2). Currently, Federally Qualified Health Centers follow the “penny pricing” policy, meaning that they may purchase the drug at a price of one penny per unit of measure. However, these savings are not always passed on to the American population. This order allows uninsured Americans to purchase these life-saving drugs “from an FQHC at a price that aligns with the cost at which the FQHC acquired the medication.” (3).
The second order passed will allow the legal importation of certain prescription drugs and the re-importation of insulin from countries where the price is lower than that of the United States (4). It is believed that by making trade easier between these countries, that over time drug prices in America will begin to decrease. The executive order points this out saying, “…the parallel trade of drugs has existed for decades and has been estimated to reduce the price of certain drugs by up to 20 percent.” (5).
The third order looks to prohibit deals between drug manufacturers and pharmacy benefit manager (PBM) middle-men (6). Currently, these middle-men negotiate significant discounts for themselves leaving medicare patients to pay list price for the drugs, while the middle-men collect large rebates. The order says that, “These rebates are the functional equivalent of kickbacks, and erode savings that could otherwise go to the Medicare patients taking those drugs.” (7). The U.S Department of Health & Human Services explains that it will be American seniors who are most affected under this order, receiving the kickbacks as discounts. They also stated, “…these Part D discounts totaled more than $30 billion, representing an average discount of 26 to 30 percent.” (8).
These executive orders can be found one after another on the Whitehouse.gov website for July 24, yet the fourth wasn’t able to be located. It’s difficult to understand why and anything would be speculation. However, in a briefing statement the direct quote for the fourth executive order is, “The fourth and final Order ensures that the United States pays the lowest price available in economically comparable countries for Medicare Part B drugs.” (9).
Hopefully over time these three executive orders will help to lower the cost of these much needed life-saving, prescription medicines.
Direct links to the three executive orders are below.
-Trent Naz
(1) Trump, D., 2020. President Donald J. Trump’S Blueprint To Lower Drug Prices. [online] The White House. Available at: <https://www.whitehouse.gov/briefings-statements/president-donald-j-trumps-blueprint-lower-drug-prices/> [Accessed 29 August 2020].
(2, 6, 9) Trump, D., 2020. President Donald J. Trump Is Taking Action To Lower Drug Costs. [online] The White House. Available at: <https://www.whitehouse.gov/briefings-statements/president-donald-j-trump-taking-action-lower-drug-costs-ensure-americans-access-life-saving-medications/> [Accessed 30 August 2020].
(3) Trump, D., 2020. Executive Order On Access To Affordable Life-Saving Medications. [online] The White House. Available at: <https://www.whitehouse.gov/presidential-actions/executive-order-access-affordable-life-saving-medications/> [Accessed 30 August 2020].
(4/8) HHS U.S Department of Health & Human Services. 2020. Trump Administration Announces Historic Action To Lower Drug Prices For Americans. [online] Available at: <https://www.hhs.gov/about/news/2020/07/24/trump-administration-announces-historic-action-lower-drug-prices-americans.html> [Accessed 30 August 2020].
(5) Trump, D., 2020. Executive Order On Increasing Drug Importation To Lower Prices For American Patients. [online] The White House. Available at: <https://www.whitehouse.gov/presidential-actions/executive-order-increasing-drug-importation-lower-prices-american-patients/> [Accessed 30 August 2020].
(6) See Source 2
(7) The White House. 2020. Executive Order On Lowering Prices For Patients By Eliminating Kickbacks To Middlemen. [online] Available at: <https://www.whitehouse.gov/presidential-actions/executive-order-lowering-prices-patients-eliminating-kickbacks-middlemen/> [Accessed 1 September 2020].
(8) See Source 4
(9) See Source 2
