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Trump executive order touts 'most far-reaching prescription drug reforms ever'

July 27, 2020 Benefits Pro


New policies announced Friday aimed at lowering drug prices under Medicare would link prices to rates paid in other countries.


President Donald Trump announced new policies Friday aimed at lowering prescription drug prices under Medicare by linking them to rates paid in other countries and allowing Americans to buy medication imported from Canada.


The changes are included in executive orders that come as Trump seeks to repair his standing on health-care issues, particularly with senior voters. Polls have shown sentiment is souring over his handling of the coronavirus pandemic and efforts to eliminate the Affordable Care Act without having a ready replacement.


Related: How states could take the lead on drug price reform


The president also announced a new policy to require federally qualified health centers to pass discounts they receive on insulin and EpiPens directly to their patients, and a drug rebate rule that removes legal shields for reimbursements paid by drugmakers to middlemen and insurers.


The orders “represent the most far-reaching prescription drug reforms ever issued by a president,” Trump said at an event in Washington. They will “completely restructure” the prescription-drug market, he said.


Trump also revived his drug rebate rule, stripping legal shields for reimbursements paid by drugmakers to middlemen and insurance plans providing coverage through Medicare’s Part D drug program or Medicaid.


Those payments create incentives for higher drug prices, drug companies have argued, because they push companies to raise prices in order to meet discount demands by drug middlemen. Instead of middlemen receiving discounts based on the price of drugs, they’d get a fixed fee under the policy change.


The pharmaceutical industry supported the plan, which was one reason for its initial demise. Trump was also apparently concerned in the past that the policy would raise insurance premiums. Lawmakers criticized the rule for its massive price tag too. It would cost taxpayers $177 billion over a decade, according to the Congressional Budget Office.

Jon Conradi, an outside spokesman for the Campaign for Sustainable Rx Pricing, which represents insurers, pharmacy benefit managers, and hospitals, lambasted Trump for bringing it back to the table.


“A reboot of the Rebate Rule, after the administration’s own admission it would increase premiums on Medicare beneficiaries and cost taxpayers hundreds of billions, would be a stunning cave to Big Pharma at the expense of American seniors and taxpayers,” Conradi said before the executive order was announced. Continue Reading