With no deal to curb drug costs, Trump tries his own changes

ByRicardo Alonso-Zaldivar AP logo
Friday, July 24, 2020
Trump signs 4 executive orders on lowering drug prices
At a White House ceremony, Trump is signing four executive orders on lowering drug prices.

WASHINGTON -- Unable to land the big deal with Congress to curb drug costs, President Donald Trump is moving on his own to allow imports of prescription medicines, along with other limited steps that might have some election-year appeal.

At a White House ceremony, Trump is set to sign four executive orders. One is about importation. The others would direct drugmaker rebates straight to patients, provide insulin and EpiPens at steep discounts to low-income people, and use lower international prices to pay for some Medicare drugs.

A senior administration official described the proposals on condition of anonymity before the event. They mostly update earlier administration ideas that have not gone into effect.

Democrats are eager to draw a contrast between Trump's orders and their sweeping plans to authorize Medicare to negotiate prices with pharmaceutical companies, an idea the president had backed as a candidate. A bill by Speaker Nancy Pelosi already passed the House and aligns with Joe Biden's approach.

Consumers may not notice many immediate changes from the new orders, which must be carried out by the federal bureaucracy and could face court challenges.

It's definitely not the bill-signing the White House had once hoped for. Trump came into office complaining that pharmaceutical companies were "getting away with murder" and promising to bring them under control. Nearly four years later, things are much the same despite some recent moderation in price increases.

A drive to pass major legislation this year stalled in Congress. Although Trump told Republican senators that lowering prescription prices is "something you have to do," many remain reluctant to use federal authority to force drugmakers to charge less.

Meanwhile, congressional Democrats are calculating that the election will strengthen their hand, and they'll finally be able to enact a law that authorizes Medicare to negotiate prices directly. Neither side in Congress has had an incentive to deal, and the White House has been unable to work Trump's will.

Last year the House passed Pelosi's Medicare negotiations bill, which would have capped out-of-pocket drug costs for older people and expanded program benefits as well. It had no path forward in the Senate, and the White House calls it unworkable.

But there was an alternative. A bipartisan Senate bill backed by Trump stopped short of giving Medicare bargaining power, but would have limited annual price increases and capped costs for older people. The bill passed out of a Senate committee but was never brought to the full body.

"It's not clear why the administration hasn't made a bigger push to line up votes to get a bill through the Senate and a deal with Congress, given strong public support to lower drug costs," said Tricia Neuman, a Medicare expert with the nonpartisan Kaiser Family Foundation.

White House press secretary Kayleigh McEnany said in a statement that the executive orders "follow a long list of decisive actions taken by President Trump to reduce the costs of prescription drugs and further deliver on his promise to ensure every American has access to better healthcare at a lower cost."

Americans remain worried about drug costs, with nearly 9 in 10 saying in a recent Gallup-West Health poll that they're concerned the pharmaceutical industry will take advantage of the coronavirus pandemic to raise prices. Another Gallup-West Health survey early in the year found 65% saying the Trump administration had made little or no progress limiting increases in prescription drug costs.

It's a particularly important issue for older people, who rely on medications to manage the onslaught of medical problems associated with advancing age. Trump's support has eroded among the elderly during the haphazard federal response to COVID-19.

The pharmaceutical industry is adamantly opposed to government efforts to curb prices, and pushed back strongly against earlier versions of the proposals in Trump's new orders. Broadcast ads from groups aligned with the industry are already airing, dubbing the plan to use international prices for certain Medicare drugs as "socialist," without mentioning Trump by name.

The four executive orders would:

  • Allow states, wholesalers and pharmacies to import FDA-approved drugs from foreign countries and sell them in the U.S. Trump has long complained that countries where the government sets the price of drugs are taking advantage of American consumers. The order includes a special provision to allow wholesalers and pharmacies to re-import insulin and biological drugs. The pharmaceutical industry says importation could undermine U.S. quality standards.
  • Use the lowest price among other economically advanced countries to set what Medicare pays for certain drugs administered in a doctor's office, including many cancer medications. This would apply to the most expensive medications covered by Medicare's "Part B," which pays for outpatient care. Drugmakers are particularly leery of the approach, since Democrats want to use it more broadly to allow Medicare to directly negotiate prices.
  • Direct federally funded community health centers to pass discounts they now get for insulin and EpiPens directly to low-income patients.
  • Ensure that rebates drugmakers now pay to benefit managers and insurers get passed directly to patients when they buy a medication. The White House last year withdrew an earlier version of the proposal, after the Congressional Budget Office estimated it would cost taxpayers $177 billion over 10 years. Administration officials now question that number.