July 24: Summary of Drug Pricing Executive Orders – July 2020

The following was released by the AMA on July 24:

Summary of Drug Pricing Executive Orders – July 2020

The President of the United States signed four new executive orders (EO) on drug pricing on July 24th. Three were available to the public as of Friday afternoon. A fourth EO, on “Most Favored Nation” status for pricing on certain drug products, was not yet available for review as of 6:00 p.m. Friday. On a call with the White House late Friday, the Administration noted that this fourth EO would only go into effect if the drug manufacturers do not come to an agreement with the Administration on lower costs. They are meeting on Tuesday.

1. Access to Affordable Life-Saving Medications

This EO would direct the Secretary to establish a program that conditions grants to Federally Qualified Health Centers (FQHC) on their ability to establish programs allowing certain individuals to purchase insulin and epinephrine at the discounted price paid to acquire the drug under the 340B program.

2. Increasing Drug Importation and Lowering Prices for American Patients

This EO directs the Secretary to take action to allow drug importation through three programs:

  • Grant waivers allowing for personal importation of prescription drugs, without limit on drug type or country of importation, so long as they meet program requirements ensuring safety
  • Authorize the re-importation of insulin products at lower costs
  • Finalize earlier proposals to create state-based importation programs allowing importation of certain drugs from Canada

The AMA submitted comments on the Administration’s previous proposal to create state importation programs, raising concerns about the ability of these programs to ensure safety and to successfully secure lower priced drugs from Canada.

3. Lowering Drug Prices for Patients by Eliminating Kickbacks to Middlemen

This EO directs the Secretary to complete the rulemaking process on earlier proposals pertaining to drug rebates. That proposal would end safe harbor protections for price reductions not applied at the point of sale, and would create a new safe harbor for those passed on to patients at the point of sale. The EO notes that before this rule is finalized there must be confirmation that it does not increase federal spending. The AMA provided comments on the proposed rule, generally supporting measures to pass drug price reductions directly to patients, but raised concerns about the potential unintended consequences, such as increased premiums and the potential to see no reductions in drug list prices.

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