Trump Signs Executive Orders to Lower Prescription Drug Prices

By , and | July 27, 2020

U.S. President Donald Trump on Friday signed four executive orders aimed at lowering the prices Americans pay for prescription drugs, as he faces an uphill re-election battle and criticism over his handling of the coronavirus pandemic.

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.

Pharma Pushback

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.

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.

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Latest Comments

  • July 28, 2020 at 2:07 pm
    Rosenblatt says:
    Okay - I think I understand this part of your argument now. You are in favor of USA citizens paying MORE for drugs in the short-term if it means they MAY pay less once the pat... read more
  • July 28, 2020 at 2:02 pm
    Craig Cornell says:
    Yes, it would charge more in the short term. But allowing for generic competition faster, it would still encourage development of new treatments. And by shortening the patent,... read more
  • July 28, 2020 at 1:45 pm
    Rosenblatt says:
    I'm sorry for misreading, Craig. Okay, let's talk about patent duration. How long do you think the patent duration should be? Currently it's usually 15-17 years. If it's less ... read more

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