Biden’s July executive order includes drug tariff provisions. But will they do enough?


President Joe Biden’s July 9 executive order included several steps toward fulfilling the campaign’s promises to take over pharmaceutical companies by allowing the importation of prescribed medicines and curbing the high cost of medicines.

These issues have been key to candidate Biden’s 2020 health platform, which he says “opposes the abuse of power” by drugs. Biden promised for him country site that it would allow consumers to buy prescription drugs from other countries, as long as the Department of Health and Human Services considers it safe. In speeches, candidate Biden also promised to reduce drug costs by 60%.

Nearly six months after his tenure, Biden issued one executive order on the promotion of economic competition, which included moves towards fulfilling these promises.

KHN has partnered with our partners at PolitiFact to analyze Biden’s promises during the 2020 presidential campaign – and, so far, experts generally say the jury is still on track to signify those efforts.

Drug import

Promise: “To create more competition for American pharmaceutical companies, Biden will allow consumers to make imported prescription drugs from other countries, as long as the U.S. Department of Health and Human Services has certified that those drugs are safe. ”

The July 9 executive order instructed the Food and Drug Administration commissioner to work with states to develop a program to bring prescription drugs from other countries, particularly Canada.

However, many drug tariff experts have told us that, of all the policy ideas aimed at reducing the cost of drugs, imports seem the least likely to happen.

“Other countries are not interested in facilitating this,” he said Benedic Ippolito, a former fellow in economic policy studies at the American Enterprise Institute.

Matthew Fiedler, a fellow of the USC-Brookings Schaeffer Initiative for Health Policy, agreed.

“This policy is unlikely to work as well as expected because Canada is unlikely to allow drug exports to the United States,” Fiedler wrote in an email.

That’s because drug manufacturers are likely to demand higher prices in Canada, since those will become de facto prices in the United States, he said. “That would cause a big increase in prices in Canada that Canada probably wants to avoid.”

This is not the first time a president has proposed importing drugs, particularly from Canada. President Donald Trump presented the same idea during his time in office. Democrats and Republicans have supported similar proposals.

During the Trump administration, a rule was finalized that allows states to apply for FDA authorization to import drugs. Many states have since passed laws to this end, but Florida is the only state that has formally applied to the FDA. The agency has not yet made a decision on the application.

The Pharmaceutical Research and Manufacturers of America, the commercial industry group that represents major pharmaceutical companies, sued HHS in 2020 in an attempt to repeal this drug import rule. The litigation is ongoing, although the Biden administration has asked for the case to be dismissed.

In a May judicial filing, the administration said the case was futile because it is unclear whether a state import plan would be approved soon.

Canada reported his concern that drug exports to the United States could trigger shortages on its borders, and after the Trump-era rule was finalized, the country shifted to block the massive export of missing drugs.

However, Rachel Sachs, a law professor and drug pricing expert at the University of Washington in St. Louis, said Biden’s “rehabilitated” policy isn’t bad.

“The price of drugs has been a major problem for many years now, and there are many political ideas on the table. We don’t lack political ideas – we lack for the actual implementation of those ideas, ”Sachs wrote in an email.“ So, I don’t think it’s at all concerned if the administration chooses to advance existing political ideas rather. than to develop new ones from scratch ”.

It is also important to remember that Biden has just issued an executive order directing that these things happen. It’s just a first step in a long line of steps, including issuing rules and giving time for public comment.

This means that details of the operation of this import policy are not yet available. The executive order requires that a report be issued 45 days later with a plan describing specific efforts to reduce the prices of prescribed drugs.

“I think we know more then,” Sachs said.

The High Cost of Drugs


Promise: “I’m going to lower the prescription drugs by 60%, and that’s the truth.”

On this commitment, the recent executive order explained the president’s vision for how to proceed.

The order included an initiative designed to support the approval framework for generic and biosimilar medicines, working with the Federal Trade Commission to address efforts to prevent competition for these types of drugs and help Medicare and Medicaid incorporate new models. of payment to cover.

Experts so far have offered measured reactions.

The administrative actions described in this executive order have the potential to reduce the prices of prescription drugs, Fiedler of the USC-Brookings Schaeffer Initiative said. But it depends more than just what the order says.

“In each of these areas, whether prices will actually fall will depend on the details of the proposals the administration is ultimately presenting,” Fiedler wrote in an email. “However, these are all areas where there are opportunities to make changes that would have a significant impact.”

Again, more will be known in 45 days, the deadline for the release of the plan to reduce the prices of prescription drugs.

It’s important to note that the FTC is an independent agency, so Biden’s main means of influencing drug policy come from his appointments with the agency, Fiedler said. It seems likely, however, he added, that the newly appointed FTC presidency will be sympathetic to resuming market behavior that delays the entry of generic or biosimilar drugs.

However, reducing drug prices by 60% would require legislation, Ippolito said of the IEA.

“And the most disruptive reforms in drug prices – the ones that could even trigger this kind of price reduction – are also the most unlikely to happen,” Ippolito wrote in an email. “In short, I suspect that this executive order will not make much progress.”

Trump also promised last year on the track of the campaign that he would lower drug prices by 60%, after repeatedly promising to reduce drug costs during his four years in office. However, little progress has been made towards this goal despite several related executive orders in 2020.

While Biden’s executive order has a different focus than most Trump-era drug tariff orders, the Biden administration has noted that it may also be open to embracing some of those policies.

Trump’s directives focused on reimbursements paid to pharmacy benefit managers that were redirected to beneficiaries, reducing the cost of insulin by convincing federal qualified health centers to make low-cost drugs available to people. at low incomes, importing drugs from Canada and linking drug prices to prices paid in other countries.

Three proposed rules that have resulted from the Trump order are being held around by the Biden administration – at least for now. One is the “Most Favored Nation Model.” This rule is supposed to correspond to US prices for certain classes of drugs with lower amounts paid in countries that negotiate drug prices.

According to Politics, the regulatory office of the Biden administration received the rule this month, which means there may be a new public comment period before the rule is finalized – although it is likely that it will take some time.

And, of course, there’s the Trump administration’s pending rule on drug imports, currently in court.

Meanwhile, Trump’s reimbursement rule has been delayed. The Biden administration has postponed its effective date to January 2023. The freezing of the rule was part of the Biden administration’s policy to review any rules finalized in the final months of Trump’s term.

No other Trump drug tariff effort has come very far. Instead, they’ve pulled a fair amount of industry pushback.

And it remains to be seen if Biden’s directives will go better.

Experts have agreed that more likely Congressional action would be needed to achieve a 60% reduction in prices. With more than three years remaining on Biden’s tenure, who knows what might even happen?

For now, let’s evaluate these “In Works” promises.

Kaiser Health News is a national health policy news service. It is an independent publishing program of the Henry J. Kaiser Family Foundation, which is not affiliated with Kaiser Permanente.

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