Three years later, Trump tackles an old promise to lower drug prices
WASHINGTON (CN) — Paying lip service to an issue often trumpeted by his campaign, President Donald Trump signed a series of executive orders Friday aimed at driving down drug prices, with little chance of enforcement before Election Day.
Among the orders announced Friday from a stage at the Eisenhower Executive Office building set to look like a pharmacy, one directs health centers receiving discounts on EpiPens and insulin products for diabetics to pass those savings on to consumers. Seema Verma, administrator for the Centers for Medicare and Medicaid Services, notes that the average the cost of insulin for seniors would be $35.
The executive order does not have immediate power, but Trump said Friday the directive would bring the cost of the drug down to just “pennies a day.” To enact the change, the administration would face regulatory burdens as well as likely litigation from pharmaceutical companies that have historically pushed back on any attempt by the federal government to control prices.
Another order signed Friday would allow states, wholesalers and pharmacies to import prescription drugs from Canada where prices for identical drugs are lower.
The administration rolled out its first iteration of this plan last December with little follow-through amid a pointed note by Kirsten Hillman, Canada’s ambassador to the U.S., that “Canada’s market for pharmaceuticals is too small to have any real impact on U.S. drug prices.”
In yet another order, Trump said he would bring back the “rebate rule” that ends rebate payments drug manufacturers pay to insurers. The president did not elaborate on whether rebates would be completely nixed or if savings would be split with patients, and the White House has not released the text of the executive orders.
Trump’s announcement of this order at the press conference devolved into a minutes-long diatribe against “middlemen, or -women, I guess.”
“Some very rich people are not going to like me today. I probably know them very well. I probably see them in Palm Beach, nobody ever talks about who they are. Everybody talks about the middlemen, right Alex?” Trump said, addressing Health and Human Services Secretary Alex Azar who also attended Friday’s signing.
Flexing the muscle memory of his 2016 campaign where he railed against the high cost of prescriptions during, the president shifted between prepared and off-the-cuff remarks today in his roughly 30-minute announcement.
“We’re taking bold historic very dramatic action to reduce the price of prescription drugs,” Trump said. “Previous administrations did nothing as lobbyists and drug companies ripped off our citizens.”
Contending that the U.S. is being “slaughtered” on drug prices, Trump said his administration has invited leading pharmaceutical executives to the White House next week to discuss the fourth of Friday’s orders.
Considered the more controversial of the administration’s proposals, the fourth order sets a pricing index on U.S. drugs pricing that can shift based on the global market rate.
The Trump administration and proponents of the so-called “international pricing index” argue it will ensure that the cost Americans pay for drugs are the same as what others pay abroad. Those in the pharmaceutical industry in particular have panned the proposal as a price-fixing by another name.
Steve Ubl, president and CEO of Pharmaceutical Research and Manufacturers of America, said in a statement Friday that price controls set through the index would be a “reckless distraction that impedes our ability to respond to the current pandemic — and those we could face in the future.”
Trump’s relationship with the pharmaceutical industry has been hot and cold. And with some regularity, he has overstated what his administration has accomplished in terms of reducing drug prices, a key tenet of his 2016 campaign.
During his State of the Union this February, Trump claimed he dropped the cost of prescription drugs for the first time in over 50 years. He made the same claim Friday.
This claim is grounded, however, in Consumer Price Index reports, or CPIs, from 2018 and 2019 that in turn relied on list prices for drugs themselves and not what a person might actually pay for them at the pharmacy. Those reports also omitted prescription drugs ordered by mail, which, according to the CPIs, account for about a quarter of all drug sales.
“In his 2020 State of the Union Address, President Trump declared that ‘we will never let socialism destroy American health care,” Ubl said. “Yet, in the middle of a global pandemic, when nearly 145,000 Americans have lost their lives and millions of others have suffered untold economic hardships, this administration has decided to pursue a radical and dangerous policy to set prices based on rates paid in countries that he has labeled as socialist, which will harm patients today and into the future.”
Trump said Friday that the executive order on international pricing won’t be triggered until August 24, essentially leaving the ball in Congress’ court to develop their own pricing proposals.
It will be a familiar scene next week: A slew of pharmaceutical companies have been in close negotiations with the White House to develop therapeutics and potential vaccines for Covid-19 since the pandemic began.
Billions have been vested into the industry already with a $2 million contract awarded this week to Pfizer for vaccine research and development. That contract was shared with German pharmaceutical company BioNTech and could eventually result in the production of some 100 million doses of the vaccine. Another 500 million doses are on tap in 2021 should the initial doses prove effective.
The White House’s Operation Warp Speed program, aimed at vaccine research and development, has already secured a $1 billion deal with AstraZenenca for 300 million vaccine doses and Novavax Inc. acquired a $1.6 billion investment. Companies like Moderna, Johnson & Johnson, and Regeneron Pharmaceuticals are also racing to find a vaccine with millions in federal dollars to speed them through.