President Donald Trump has signed an executive order aimed at lowering drug prices for Americans that includes a plan to do away with what the industry claims is a major flaw in the Biden era Inflation Reduction Act (IRA).
In his first term, Trump repeatedly slammed the high prices paid by American health systems and patients from medicines compared to other parts of the world, and mooted the notion of a system in which US prices would be set at the lowest available for a medicine overseas.
His latest order does not appear to go that far, but it does deliver a pledge to stop the pharma industry charging US patients "more than those in other countries for the exact same prescription drugs, often made in the exact same places."
Among the measures included in the plan are allowing US states to import medicines directly from countries with lower prices – which has raised fears of creating a vulnerability in the supply chain that could allow entry of counterfeit medicines and create shortages elsewhere – and changes to Medicare to improve its ability to provide higher-priced medicines to seniors.
The order also says the IRA – which introduced Medicare powers to negotiate drug prices with manufacturers – has a commendable goal, but is hamstrung by an "administratively complex and expensive regime" that will be simplified.
The administration intends to improve on the 22% in savings that the Biden administration achieved in the first round of negotiations, due to come into effect in 2026, according to a fact sheet distributed by the White House.
In one move that will please the drug industry, Trump has promised to do away with the detested 'pill penalty', a shorter window time for small-molecule drugs compared to biologics before they can become eligible for price negotiations – nine years versus 13 years, respectively.
That is a discrepancy that "threatens to distort innovation by pushing investment towards expensive biological products, which are often indicated to treat rarer diseases, and away from small molecule prescription drugs, which are generally cheaper and treat larger patient populations," according to the order.
Another element that will please pharma manufacturers is a re-evaluation of the role of middlemen like pharmacy benefit managers (PBMs) – whose activities are already under investigation by the Federal Trade Commission (FTC).
In January, the FTC issued a second report suggesting that PBMs' business processes "may inflate drug costs, squeeze independent pharmacies, and deprive Americans of affordable, accessible healthcare."
The order also includes provisions to clear a backlog of generic and biosimilar drug applications and further efforts to reduce the cost to uninsured and underinsured patients of essential medicines like insulin and epinephrine injectors.
https://pharmaphorum.com/news/trump-pledges-drug-price-cuts-and-action-pill-penalty
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