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 Trump has previously proposed most of the changes made by the
executive orders he signed on Friday, but this is the first time
they have made it into signed executive orders.
One order would allow for the legal importation of cheaper
prescription drugs from countries like Canada, while another would
require discounts from drug companies now captured by middlemen to
be passed on to patients, Trump said.
Another measure seeks to lower insulin costs while a fourth, which
may not be implemented if talks with drug companies are successful,
would require Medicare to purchase drugs at the same price that
other countries pay, Trump said.
Executives of top drug companies have requested a meeting to discuss
how they can lower drug prices, the president said.
"We will see what those discussions indicate but the agency is
prepared to move forward," said Medicare chief Seema Verma.
The orders received swift pushback from the pharmaceutical industry.
The move was "a reckless distraction that impedes our ability to
respond to the current pandemic – and those we could face in the
future," Pharmaceutical Research and Manufacturers of America said
in a statement.
Wall Street analysts were skeptical that the orders would have much
effect on drugmakers and said they could prove difficult to
implement in practice.
"We believe they are likely geared more towards deriving campaign
talking points rather than producing tangible, material effects,"
Brian Abrahams, a biotech analyst at RBC Capital Markets, said in a
note.
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Shares of several drugmakers ticked up as Trump outlined the plan, recovering
some of the day's losses.
Trump repeatedly has called for lowering the cost of prescription drugs but
Congress has not yet passed a major drug price reform.
Many of the administration's past efforts to cut drug prices, including its plan
to force insurers and other healthcare payers to pass rebates on to patients,
have stalled amid industry pushback.
"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," the Pharmaceutical Care Management Association, whose members
negotiate rebates for healthcare payers with drugmakers, said in a statement.
Paying the rebates directly to seniors in the form of discounts could cut their
drug costs by as much as $30 billion, or as much as 30%, U.S. Health and Human
Services Secretary Alex Azar said in a Friday press call.
Trump is under fire for surging coronavirus cases in the United States and beset
by decreasing poll numbers ahead of Nov. 3 elections. On Friday, he also said
that the White House would propose a healthcare bill soon but offered few
details.
Drugmakers often negotiate rebates or discounts on their list prices in exchange
for favorable treatment from insurers. As a result, insurers and covered
patients rarely pay the full list price of a drug.
(Reporting by Jeff Mason; Writing by Alexandra Alper; Editing by Jonathan Oatis,
Peter Henderson and Tom Brown)
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