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You are here: Home / Articles / White House Preparing Order that Would Cut Drug Prices for Medicare

White House Preparing Order that Would Cut Drug Prices for Medicare

July 30, 2019 • By Michael Erman and Carl O'Donnell

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(Reuters)—U.S. President Donald Trump is considering a sweeping executive order that would cut prices on virtually all branded prescription drugs sold to Medicare and other government programs, according to two industry sources who had discussions with the White House.

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The order under discussion would be much broader than the Administration’s previously disclosed proposal to lower prices on physician administered, or Part B, drugs by tying prices to lower costs in other countries.

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The administration is now looking at ways to use this or a similar method to lower prices in Medicare’s much larger Part D, which is for widely used prescription drugs patients take at home, such as for cholesterol and blood pressure, the sources said.

The White House declined to comment, and it was unclear how far along the any such plan was from being undertaken. The U.S. Department of Health and Human Services, also declined to comment.

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Americans pay the highest prices for prescription drugs in the world as most other developed nations have single-payer systems in which the government negotiates drug prices for its people.

The U.S. government in 2016 spent around $29 billion on prescription drugs in Medicare’s Part B, which includes most injectable drugs, and nearly $100 billion in Part D, which covers as pills and other drugs usually dispensed in pharmacies.

Trump is also considering extending the pricing controls to the U.S. Department of Defense, which runs the Tricare health plan for military personnel and their families, as well as the Department of Veterans Affairs, the sources said.

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Executive orders often go through various drafts and incarnations, and sometimes competing versions of the same order are floated within the Trump White House. In addition, some executive orders do not end up being signed.

The drug pricing executive order could come as soon as the next few weeks, the sources said.

U.S. Senators Chuck Grassley and Ron Wyden – the top Republican and Democrat on the U.S. Senate Finance Committee – earlier this week announced a proposal to lower prescription drug prices that could save $100 billion in costs to government healthcare programs.

The White House could delay the executive order if the Senate bill looks likely to garner bipartisan support, the sources said.

If implemented, the executive order could significantly increase the number of drugmakers whose sales could take a hit. AbbVie, Eli Lilly and Co and Pfizer Inc all have substantial exposure to Medicare Part D. Companies with major exposure to Part B include Merck & Co, Bristol-Myers Squibb Co and Roche.

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Filed Under: Legislation & Advocacy, Pharma Co. News Tagged With: executive order, Medicare drug price cut, Medicare Part B, Medicare Part D, Prescription drugs

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