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Trump’s Executive Orders For Controlling Drug Prices

On July 24, 2020, President Trump signed three Executive Orders aimed at the pharmaceutical industry in an attempt to reduce the consumer’s cost of certain medications through a variety of measures.  Each order requires that the Department of Health and Human Services (HHS) engage in a rule-making process that may take months to unfold, and then, if there is a change in the administration, well, it could all be undone.

Order 1: Insulin/Epinephrine – Under this Order, these medications would be made available through Federally Qualified Health Centers and community health facilities (not-profit health centers) at a significantly discounted prices for low income individuals.  Even if implemented, this will have little impact on the manufacturers general pricing.  Therefore the options for all but the low-income population would not benefit from this order.

Order 2: Drug Importation – Arguably to most common complaint about drug prices in the U.S. is that the very same drugs can be obtained at pennies on the dollar internationally.  However, this practice is highly frowned upon by drug manufactures who use scare tactics about patient safety and quality control.  The Order directs HHS to authorize, among other things, re-importation of insulin If HHS can effectively argue that it qualifies as emergency care.   In addition, manufactures would likely implement measures to prevent or limit re-importation efforts.

Order 3: Anti-kickback Safe Harbor – The Administration contends that a handful of Pharmacy Benefit Managers (PBMs) effectively have too much of a sweetheart deal with the drug manufactures through the mechanism of exorbitant drug rebates which leads to risings costs, especially under the Medicare Part D benefit.  Think of PMBs (think big-box store) move the lion’s share of meds through the system and this leverage allows them to dictate large rebates with the manufactures.  This Order would make those rebates credits at the point-of-sale to the end consumer.  The unintended consequence to cutting the PBM out of the rebate game is higher premiums prices for Medicare Part D.  The Administration floated this same idea last year only to scuttle it shortly after.

You can read the full legal alert on the Executive Orders under our Client Alerts HERE. For more information on how you can find savings in your employer drug spend, or how to move your health plan forward with progressive strategies, contact us at .

Blessings to all,

Trump Executive Order

Prescription Executive Order

Importing Prescriptions Executive Order

Drug Rebate Executive Order

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