A promised executive order that would tie drug prices to their
costs in other countries has yet to emerge, although President Donald Trump has
promoted the order as part of his re-election campaign. Meanwhile, payers and
PBMs are continuing to push back against three executive orders the Trump
administration issued in July with the intention of lowering drug prices, one
of which would overhaul the Medicare Part D prescription drug rebate system.
"I think the purpose of these executive orders is to give
the president some talking points going into the debates," says Avalere
Health founder Dan Mendelson. He adds that, regardless of their purpose, the
orders will not make a difference in the real world any time soon.
Administration officials indicated during the rollout of the
executive orders on July 24 that the international pricing order would be
released within 30 days of the debut of the other three drug pricing orders.
Yet the deadline passed and the administration at press time had not released
the promised order.
Meanwhile, the executive orders that actually have been released
are being criticized from stakeholders across health care. The order that would
remove safe harbor protections from the Anti-Kickback Statute for prescription
drug rebates in Medicare Part D has been panned even by conservatives.
Alex Brill, a resident fellow at the American Enterprise
Institute (AEI), penned a white paper sponsored by PBM trade group
Pharmaceutical Care Management Association (PCMA) that concluded the executive
order would "restrict an important tool for providing savings to the
federal government and Medicare Part D beneficiaries. Moreover, net drug costs
and drug company revenues would rise significantly if the Medicare Part D safe
harbor for rebates is eliminated."
Mendelson says that the pharmaceutical industry is beginning to
realize that it will have to change its business model one way or another.
"The pharmaceutical industry is facing a real pivot point
where there are going to have to be more innovative ways to price for these
products," Mendelson observes. "…it's really important that the
industry start to figure out ways to engage positively with payers. And the
government is the biggest payer."
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