Washington: US President Donald Trump on Monday signed an order that could cut the prices of some US drug costs by tying their prices to those paid by countries with national health systems, a move drugmakers said will stifle innovation.
The order came after an earlier attempt to force pharmaceutical companies to make reductions in the prices of these drugs didn’t give the desired results, CNN reported.
Trump, tweeted this while on a campaign swing to Nevada, saying that he’d signed an order on the “most favored nation” plan, which would try to link Medicare Part B and Part D prices to lower prices paid by other countries, adding that this will see the cost of prescription drugs falling like a rock very soon. The approach was broader than an initial effort that only targeted Part B.
The order is a first step instructing the US Department of Health and Human Services to begin the rule-making process to test “a payment model” for some medicines.
However, the order falls far short of an immediate cut that Trump has touted would lower patients’ out-of-pocket costs. Instead, it starts the process for HHS Secretary Alex Azar to test the impact of such a change. That likely means patients won’t see lower prices until well after the US presidential election in November, if at all, as the path to lowering drug prices remains uncertain.
In late July, Trump announced plans for multiple executive orders, including one that would allow Americans to buy medication imported from Canada. The president announced the “favored nations order” at the same conference in an attempt to pressure drug companies to the table to strike a deal.
The new order echoes the earlier order’s provision on Part B, which refers to the Medicare plan that encompasses therapies administered in a doctor’s office or hospital, but adds a section on Part D, the prescription drug benefit.
If Trump ultimately benchmarks prices to those of countries with universal health care systems, it could slash revenues for the drug companies.